Conduct risk assessment before giving guarantees to bodies: CAG
The Comptroller and Auditor General (CAG) found fault with the State government for not complying with its own orders while extending guarantees to various bodies.
Hyderabad: The Comptroller and Auditor General (CAG) found fault with the State government for not complying with its own orders while extending guarantees to various bodies.
The CAG report on Sunday pointed out that guarantees to the tune of Rs 41,892 crore was given by the State government in the financial year 2017-18 stood at 51 per cent of the total Revenue Receipts (RRs) of the preceding year, which stood at Rs 82,818 crore. However, it is well within the 90 per cent ceiling relating to the guarantees.
But, the CAG said that it has found that the State government is extending guarantees to bodies that had not finalised their accounts.
No revenue on account of Guarantee Commission (Rs 209.45 crore) was received under the head of Commission for Guarantees given by the government.
Besides, the government also extended guarantees for the interest portion of the loan amounting Rs 71.03 crore in respect of two entities.
For these reasons the CAG asked the government, besides complying with its own orders, it should also ensure that a comprehensive risk assessment be done before sanctioning guarantees.
Similarly, the public watchdog also asked the government to ensure that the future loans and advances that it wants to extend to the autonomous bodies are predicated on furnishing of audited accounts of the previous year.
The CAG recommendation has come as the Loans and Advances given by the State government to the autonomous bodies and corporation were stood at Rs 15,869 crore.
While "the average rate of interest on the government borrowings was 7.21 per cent, the interest receipts as a percentage of outstanding loans and advances was only 0.53 per cent.
The report also found out that the government loans extended to the tune of Rs 428.45 crore in 2017-18 did not specify any terms and conditions, like the schedule of repayment, rate of interest, number of installments etc.
The loans are being provided to the autonomous bodies for servicing their past loans and the current level of recovery of loans was low. "In the budget estimates, an amount of Rs 5,807 crore was estimated to be recovered in 2017-18.
The actual recovery was only Rs 138 crore. This was only 2.38 per cent of the estimated recovery, the CAG report said.