 "Karnataka spent 17% less than budgetary provisions in FY14, says CAG")
As against the total provision of Rs 137,314 crore during 2013-14, an expenditure of Rs 113,717 crore was incurred, the CAG has pointed out in its latest report on the state's finances for the year-ended March 2014, which was tabled in the legislative assembly last week.
The CAG has advised the state government to carry out the budgetary exercise more realistically and avoid non-utilisation of funds and excessive provisions in the annual budget.
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“Budgetary control should be strengthened in all departments to avoid cases of provision remaining unutilised as huge unutilised provisions were observed across several grants,” the CAG said.
The CAG has also pointed out that supplementary provision of Rs 2,045.49 crore in 16 cases was unnecessary, re-appropriation of funds in 74 cases was made injudiciously, resulting in either unutilised provisions or excess over-provision. In eight grants, Rs 3,722 crore was surrendered in the last two working days of the financial year. Contingency Fund transactions were not in accordance with the rules governing the fund (three cases), the report said.
It has also noted that excess expenditure of Rs 375 crore in two cases are required to be regularised under Article 205 of the Constitution. Expenditure aggregating to Rs 83.90 crore in 16 cases which should have been treated as ‘New Service / New instrument of service’ was incurred without the approval of the legislature.
The budget / expenditure suffered on account of operation of incorrect budget lines for release and accounting of ULB grants. Distinct heads to be opened for accommodation of budget / expenditure of the ULB sector which should indicate them merely as grants to ULBs. The budget document brought out for devolutions to ULBs should be reviewed for its classification of expenditure being merged with the state budget, the CAG report said.
The CAG has also highlighted that 52 per cent of the open market borrowings are in the maturity bracket of above seven years. The borrowing programme of the state government has to be need based, as the accumulated borrowing has a bearing on future generation. Parking of funds in either in nationalised bank / deposit account should be avoided as it reflects poor cash management.
Fiscal position
The state continued to maintain revenue surplus during 2009-14 and kept fiscal deficit relative to GSDP below the limit prescribed under FRA. During 2013-14, revenue surplus was Rs 353 crore mainly on account of compression of expenditure (Rs 906.60 crore) and failure to carry out adjustment to the Consolidated Sinking Fund account (Rs 583.83 crore) and non-adjustment of Rs 22.68 crore (net) to the Karnataka Silk Worm Cocoon and Silk Yarn Development and Price Stabilisation Fund.
The fiscal deficit during the year was 2.84 per cent of the GSDP (Rs 601,633 crore), which was within the limit laid down under the FRA as the capital expenditure was also compressed to the extent of Rs 500 crore on account of adjustment of the expenditure under the Consolidated Fund to the Infrastructure Initiative Fund in Public Account.
- The state government failed to spend Rs 23,597 crore, which is 17.2 per cent of the overall expenditure budgeted for 2013-14
- The CAG has also pointed out that supplementary provision of Rs 2,045.49 crore in 16 cases was unnecessary, re-appropriation of funds in 74 cases was made injudiciously, resulting in either unutilised provisions or excess over-provision