The Comptroller and Auditor General of India has observed the budgetary allocations and spending by Telangana Government during the financial year 2014-15 were unrealistic. “Evidence of unrealistic budgetary assumptions and weaknesses in expenditure monitoring and control were noticed during the year,” the CAG said in its report on State Finance for the year ended March 2015 which was tabled in State Legislative Assembly on Wednesday.
In Audit findings, the CAG said that the State registered a revenue surplus of Rs. 369 crore during 2014-15. Total outstanding liabilities constituted 22.79% of GSDP which was within the ceiling of 27.6% stipulated in FRBM Act for the year 2014-15. However, the revenue surplus has to be viewed in the light of the fact that the government has to work out its liability of Rs. 651 crore on account of Zilla Parishad Provident Fund contributions and incorrect booking of Rs. 690.27 crore.
Revenue receipts of Rs. 51,042 Crore during 2014-15 were mainly on account of tax revenue collections (57.38%) and Non-Tax Revenue Collections (12.63%). Out of the total expenditure of Rs. 60,529 Crore, Revenue expenditure accounted for 83.72% (Rs. 50,673). Capital Expenditure was Rs. 8,373 crore, which amounted to 13.83% of overall expenditure.
“Although the State Government accorded adequate fiscal priority to development expenditure during 2014-15, it did not ensure that the allocated funds were release fully for the intended purposes. State outlay on education (11.57%) in particular, was less than that of the General Category States (16.23%). Further, the share of Social Sector expenditure to aggregate expenditure (34.42%) was also lower in the State, compared to the other General Category States (36.50%),” said the CAG report.
The CAG said that the Maturity profile of Debt indicates that State has to repay more than 50% of debt within seven years. “The entire Supplementary provision (Rs. 5,359 Cr) proved unnecessary as the actual expenditure (Rs. 64,097 Cr) incurred was less than original budget provision (Rs. 1,01,323 Cr) and savings for the current year stood at Rs. 42,584 Cr (40%). Out of the savings, Rs. 24,622 Cr were surrendered on 31 March 2015,” the report said.
The CAG observed that several policy initiatives taken up by government were either unfulfilled or were partially executed, primarily due to non-approval of scheme guidelines/modalities, non-commencement of works for want of administrative sanction and poor project implementation, apart from non-release of funds.
“Excess expenditure of Rs. 304 crore was incurred during 2014-15 without Legislative authorisation. Lump sum provisions (Rs. 2,555 Cr) without specific details of expenditure were included in the budget for 2014-15. The entire provision was surrendered at the end of the year. There were several instances of budgetary misclassifications on subsidies, Subvention from Central Road Fund, etc., which indicated deficiencies in budget formulation. Unrealistic budgetary allocations resulting in substantial savings, unnecessary Supplementary grants, expenditure incurred without provision and excess re-appropriations, resulting in excess provision are indication of poor budget management,” observed the CAG in its report.