Highlighting inconsistency in the government data, the Comptroller and Auditor General (CAG) today suggested that the Centre should take steps to ensure that FRBM disclosure statements are transparent and complete in all respects.
In its first report relating to review of the Fiscal Responsibility and Management (FRBM) Act, the CAG said that the government should carry out suitable amendments to the Act as well as Rules to address the issues of inconsistency.
"The government may strengthen the process of making underlying assumptions for projection of receipt and expenditure in various fiscal policy statements to insulate them from frequent changes and to seamlessly integrate the projection in the Budget," said the report which was tabled in Parliament.
It further said that the FRBM disclosure statements tabled in Parliament for 2014-15 and earlier years contained inconsistencies relating to "understatement of non-tax revenue; variations in closing and opening balances of physical and financial assets; overstatement of loans to foreign governments; and discrepancies in the estimation of provision on grants for creation of capital assets."
Citing specific instance, the report said that refund of Rs 1.17 lakh crore (including interest on refunds of taxes) was made from gross direct tax collection in 2014-15 but was not disclosed in the government accounts.
The CAG also regretted that the recommendation of 12th Finance Commission relating to inclusion of eight additional statements in the union government accounts for greater transparency, were not acted upon, despite in-principle acceptance of the recommendation by the government.
From 2011-12 onwards, the outstanding liability in terms of GDP outstripped the targeted level as contained in the Medium Term Fiscal Policy Statement.
Further, due to understatement of liabilities of Rs 6.70 lakh crore in the public account, the total liabilities of the union government were contained at 46.2 per cent of GDP, which otherwise would have stood at 51.6 per cent of GDP in 2014-15.
The government had enacted the FRBM legislation in 2003 to to institutionalise fiscal discipline, reduce fiscal deficit, improve macro-economic management and the overall management of the public funds by moving towards a balanced budget.
Under the FRBM Act, the government is required to table various policy statements in Parliament.
Disclaimer: No Business Standard Journalist was involved in creation of this content
