CAG slams state’s financial performance
The Comptroller and Auditor General (CAG) has found several shortcomings in the Maharashtra government’s financial performance. In a report tabled in the state Assembly on Thursday, the CAG has pointed out that the government earns miniscule returns on its investments and it takes high interest loans to meet its current expenditure. The CAG has also criticised the practice of spending majority funds in the last month of financial year.
As of March 31, 2012, the state government had invested `83,016 crore in statutory corporations, rural banks, joint stock companies and cooperatives. The average return on this investment was 0.13 per cent in the last five years, even as the government paid an average interest rate of 7.37 per cent on its borrowings during 2007-12.
“The government should take steps to ensure better value for money in investments. Otherwise, high-cost borrowed funds will continue to be invested in projects with low financial returns. Projects, which are justified on account of low financial but high socio-economic returns, may be identified and prioritised. The working of the state public sector undertakings, which are incurring huge losses, should be reviewed and a strategy should be worked out,” the CAG has said.
It has further pointed out that more than 50 per cent expenditure on eight major heads — including tourism, urban development and welfare of scheduled caste, scheduled tribes and other backward class — for the year 2011-12 was incurred in March 2012.
The CAG also observed, “The slow pace of implementation of various social and developmental programmes left an overall saving of `21,155.62 crore, set off by an excess of `1,272.28 crore. There were instances of inadequate provision of funds and unnecessary/excessive reappropriations. Rush of expenditure at the end of the financial year was another chronic feature noticed in the state. In many cases, the anticipated savings were either not surrendered or surrendered on the last two days of March 2012, leaving no scope for utilising these funds for other developmental purposes.”
The CAG has also found that some portion of the high-cost borrowings is being used by the government for meeting its current expenditure. “Borrowed funds should be, as far as possible, utilised only for infrastructure development, whereas revenue expenditure should be met fully from the revenue receipts. Steps should be taken to achieve zero revenue deficit as soon as possible,” the CAG has observed.
Post new comment