Non-submission of utilisation certificates restricts fund flow

The Andhra Pradesh government has failed to submit the mandatory utilisation certificates (UCs) for months for funds released by the Centre under various schemes, resulting in freezing of over Rs 800 crore in additional grants, according to an official report.
The development comes amid signs of strains in the ties between the TDP and its ally in the state the BJP.
Utilisation certificates from the state government for a sum of Rs 3,059 crore have been pending for six months to more than one year for different schemes, a senior BJP leader said, citing an official report compiled by the Government of India.

Consequently, the Centre stopped releasing Rs 830 crore the state was supposed to get as additional grant under the schemes, he said.
For 13 central schemes, the state government did not submit UCs for more than 12 months now, while for 16 schemes UCs were pending for 6-12 months, the Centres report said.
For another five schemes, UCs were not submitted in the last six months, it said.

The Union Ministry of Housing and Urban Affairs (MHUA) released Rs 1,125 crore to AP under the Smart Cities Mission for development of Visakhapatnam and Kakinada cities chosen in the first lot two years ago but the state government did not account for the money for more than a year now.

The MHUA, hence, froze a further grant of Rs 300 crore, critical for infrastructure development in these cities, according to the report.
A state government official offered an explanation for the delay in submitting UCs.
"Non-submission of UCs could be mainly because of two reasons. Either the central funds were not fully utilised in time or used for other purposes.
"Given the severe financial crunch faced by the state, 'adjustment' of funds is not uncommon," a senior official in the finance department said.
AP was given Rs 35 crore under the National Health Mission (NHM) two years ago but the state did not submit the requisite UCs or the audited financial statement for the financial year 2016. The state, thus, could not draw a further grant of Rs 35 crore under NHM, the report said.

The MHUA granted Rs 81 crore under AMRUT scheme for revitalising urban local bodies but, since the state did not furnish UCs for this, a further grant of Rs 162 crore lies frozen, it said.
In all, Rs 2,695 crore was involved in 13 schemes for which UCs were not furnished for more than a year now, forcing the Centre to stall release of an additional Rs 542 crore, the official report revealed.
For establishing a cancer centre in Kurnool town, the Centre released Rs 54 crore but since UC was not submitted the balance Rs 17 crore was not granted.

Similarly, Rs 21 crore was released as the Centre's share for upgrading the government medical colleges in the state.
As the government did not furnish "proof of depositing state share" as well as UC for Rs 21 crore, the Centre stalled a further grant of Rs 28 crore, adversely affecting the project, it said.
The Roads and Buildings Department got Rs 111 crore under the Central Road Fund but, as it is yet to submit UC for the amount, a further Rs 80 crore remains frozen, the official report said.
Under the Pradhan Mantri Matru Yojana, the state government could not draw Rs 65 crore because it failed to submit a UC for an equal amount for six months now.

The AP government managed to get an additional sum of Rs 3,306 crore under 82 major centrally-sponsored schemes (CSS) during April-January in the ongoing fiscal compared to the corresponding period last year (41.22 per cent increase).
It has drawn a total of Rs 11,365 crore under CSS so far this year.
A major chunk of the additional grants have come under rural jobs scheme MGNREGS and the Pradhan Mantri Krishi Sinchayi Yojana, the BJP leader, who did not want to be quoted, said.
The TDP, led by Chief Minister N Chandrababu Naidu, is "disappointed" that Union Finance Minister Arun Jaitley's budget did not address the state's needs.

However, the regional party won't opt out of the alliance with the BJP yet, TDP sources said.