CAG report: State’s fiscal status bleak

THIRUVANANTHAPURAM: The CAG report on the state finances, which was tabled in the assembly on Wednesday, said that the fiscal position of the state deteriorated during 2016-17 as compared to 2015-16 in terms of three key fiscal parameters: Revenue, fiscal and primary deficits.
The 9.53% growth in revenue receipts during the period was the lowest in the past five years.

The revenue deficit increased from Rs 9,657 crore in 2015-16 to Rs 15,484 crore in 2016-17, the report said, adding that fiscal deficit increased from Rs 17,818 crore in 2015-16 to Rs 26,448 crore in 2016-17.

The revenue receipts were insufficient to meet its non-plan revenue expenditure, the report pointed out.

In its recommendations, the CAG report has stressed the need for the government to control the fiscal deficit to make it eligible for benefits recommended in the 14th finance commission report. The government will also have to address the decreasing trend in the growth of its own tax revenue and measures should be taken to improve, it said.

The report said though the share of the capital expenditure in total expenditure increased during the past two years, it was on the lower side compared to the general category states in 2016-17.

The state’s share of expenditure on health and education sector was more than the general category states. But the share of capital expenditure and development expenditure was less than that of the general states.

The report has recommended the state to improve its expenditure on capital section to match the status of general category states. It also pointed out that steps should be taken to reduce the arrears in repayment of loans.

The state government has been raising loans from financial institutions and it is the responsibility of departmental officers to arrange for prompt repayment of loans.

The finance department should introduce a comprehensive accounting system for the National Cooperative Development Corporation (NCDC) loans and prepare repayment schedules to avoid excess payments and timely transfer of subsidy portion to revenue account, it further said.

The report observed that though the funds for implementing various schemes were released to the district collectors with detailed guidelines, efforts were lacking from the authorities to implement it on time and utilise the funds fully in the year of release or in the succeeding year.

“It is recommended that a review of utilisation may be conducted at the district collector-level in every six months to avoid blockage of unspent balance,” said the report.