CAG report leads to Telangana's humiliation, says that state is actually in revenue-deficit
- The Telangana government registered revenue surplus of ₹ 1,386 crore during 2016-17
- But it was overstated at ₹ 6,778 crore on account of irregular accounting
FollowThe Telangana government registered revenue surplus of ₹ 1,386 crore during 2016-17 but it was overstated at ₹ 6,778 crore on account of irregular accounting, the Comptroller and Auditor General said.
“Thus, the state had revenue deficit of ₹ 5,392 crore in 2016-17,” it said.
Fiscal deficit (₹ 35,281 crore), which stood at 5.46 percent of Gross State Domestic Product (GSDP), was understated by ₹ 2,500 crore due to crediting of borrowed funds as Revenue Receipts,” the CAG said in its report on State Finances for the year ended March 2017.
The maturity profile of debt as on March 31, 2017 indicated that state has to repay 49 percent of debt amounting to ₹ 56,388 crore within the next seven years, the report tabled in the Telangana assembly said.
“The repayment of debt as percentage of tax revenue increased from 7.12 cent during 2015-16 to 32.16 cent during 2016-17,” the government auditor said in its Analysis of Finances of the state government.
The ratio of fiscal deficit to GSDP excluding amount transferred under UDAY scheme (₹ 7,500 crore) was 4.3 percent, it said.
“This exceeded the ceiling of 3.5 percent stipulated for 2016-17 by the 14th Finance Commission and targeted in Medium Term Fiscal Policy Statement (MFPS) of the state under Fiscal Responsibility and Budget Management (FRBM) legislation,” it said.
Capital expenditure (₹ 33,371 crore) was more than the budget estimates (₹29,313 crore).
“Its ratio to total expenditure stood at 28.22 percent which was higher than the combined average (19.70 percent) of General Category States,” it said.
The capital expenditure of the state, excluding ₹ 7,500 crore transferred to discoms (state power distribution companies) under UDAY scheme, was ₹ 25,871 crore, it said.
During the year, revenue expenditure accounted for 69 percent of the state’s aggregate expenditure, which was in the nature of current consumption, leaving only 31 percent for investment in infrastructure and asset creation, it said.
Devolution to the state was enhanced to the tune of ₹ 2,525 crore during 2016-17 on the basis of 14th Finance Commission recommendations, the report said.
“Audit noted that additional devolution led to increase in revenue expenditure by ₹ 5,536 crore over the previous year,” it said.
