Telangana pumped up revenue surplus, CAG exposes deficit of Rs 5,392 crore

Hyderabad: The Comptroller and Auditor General (CAG) has been very critical of the TS government's financial management and financial indiscipline, suggests audit reports tabled by the government in the Assembly on Thursday. Against the TS government’s claim of surplus budget in the financial year 2016-17, the CAG report commented that the revenue surplus was overstated by Rs 6,778 crore on account of irregular accounting. Thus the state had a revenue deficit of Rs 5,392 crore in 2016-17.

The fiscal deficit (Rs 35,281 crore) which stood at 5.46 per cent of Gross State Domestic Product (GSDP) was understated by Rs 2,500 crore due to crediting of borrowed funds as revenue receipts. The CAG said that the ratio of fiscal deficit to GSDP, excluding the amount transferred under Ujwal Discom Assurance Yojana (UDAY) scheme (Rs 7,500 crore), was 4.3 per cent. This exceeded the ceiling of 3.5 per cent stipulated for 2016-17 by the 14th Finance Commission and targeted in the medium term fiscal policy statement of the state under Fiscal Responsibility and Budget Management (FRBM) legislation.

CAG said that under UDAY scheme, against Rs 8,931.51 crore borrowed through UDAY bonds during the year, the state government released Rs 7,500 crore only to Discoms at the end of the year. The entire amount transferred to Discoms has been booked under capital expenditure as equity.