CAG report for 2019-20 tabled in Assembly

Amaravati: The CAG report for 2019-20 tabled in the AP Assembly here on Friday pointed out several lapses in the financial management during the five- year period between 2015 and 2020.

"These were pointed out even the last year, yet are continuing", it said. The total outstanding debt of the State government at the end of 2019-20 was Rs 3,01,803 crore.

Approximately 65 to 81 per cent of borrowed funds were used for repayment of debt during the period 2015-16 to 2019-20, indicating that the State is borrowing primarily for restructuring of previous debts rather than for infrastructure creation.

The State witnessed a decrease of 3.17 per cent in revenue receipts during the year 2019-20 as compared to the previous year, due primarily, to decrease in collection of Own Tax Revenue and tax transfers from Government of India.

Revenue expenditure increased by 6.93 per cent during 2019-20, mainly due to the implementation of new welfare schemes during the year. This resulted in an increase of revenue deficit of the State by 90.24 per cent as compared to the previous year. Simultaneously, the State government has reduced the expenditure on asset creation.

Borrowed funds should ideally be used to fund capital creation and developmental activities. Using borrowed funds for meeting current consumption and repayment of interest on outstanding loans is not sustainable, the report said.

The fiscal parameters of the State as reflected in its revenue, fiscal and primary deficits, were negative throughout the five-year period 2015-20. There were instances of misclassification of revenue transactions under capital section and non-accountal of other liabilities, which would have pushed up the deficits to a further extent.

The liabilities of the State have been increasing year-on-year and over 80 per cent of the borrowings during the year 2019-20 were utilised to balance the revenue account of the State affecting the asset creation in the State.

The report also objected to procedural lapses like tabling the supplementary budget estimates after the closure of the financial year and after the funds provided for in the supplementary budget have been expended.

Persistent excess expenditure over grants approved by the State Legislature was also violative of the will of the Legislature.

The increase in the revenue, fiscal and primary deficits of the State as compared to budget estimates, despite the expenditure being lower than the estimates, was primarily due to decrease in receipt of grants-in-aid from Government of India by 64.18 per cent than budgeted.