Maharashtra govt faces flak for ‘poor money management’, supplementary provision of Rs 35,468.54 crore

Finance ministry failed in realistic planning: CAG report

Written by Shubhangi Khapre | Mumbai | Published: April 8, 2017 3:04 am
maharashtra finance ministry, maharashtra finance ministry spending report, CAG report, CAG news, maharashtra news, latest news, indian express From the CAG observations, it is evident that state Finance Minister Sudhir Mungantiwar appears to have faulted on two critical parameters of good money management. (File Photo)

The state finance ministry has come under sharp criticism for poor money management resulting in slow pace of enforcement of various social and developmental programmes in Maharashtra. To begin with, the supplementary provision of Rs 35,468.54 crore, which amounts to 14 per cent of the original provision during the year 2016, was considered unnecessary by the Comptroller and Auditor General of India.

As against the original provision of Rs 2,53,591.80 crore, expenditure of Rs 2,36,066.30 crore was incurred implying that supplementary provisions could have been avoidable as expenditure did not even touch the original provision.

From the CAG observations, it is evident that state Finance Minister Sudhir Mungantiwar appears to have faulted on two critical parameters of good money management. It reflects the mismatch between the plans and budgetary allocations leading to excess reliance on supplementary provisions which were unwarranted.

Secondly, it was pointed out that they failed to bring in discipline to avoid the rush by various departments in the last month of financial closure, March.

The CAG points out, “In view of overall saving of Rs 52,994.04 crore, the supplementary provision of Rs 35,468.54 crore proved wholly unnecessary.”

The failure of the finance ministry to control the expenditure rush in the closing month saw an amount of Rs 20,940.56 crore accounting for more than 50 per cent of the total expenditure being incurred in March 2016.

The report states, “In 35 grants amounting to Rs 7,941.59 crore, the expenditure exceeded by Rs 50 crore and also constituted 51 to 100 per cent of total expenditure during the last quarter of 2015-16. Further, of the Rs 7.941.59 crore, an expenditure to the extend of Rs 7040.03 crore (89 per cent) was incurred in March 2016.

Sources in the government told The Indian Express, “In spite of repeated warnings and reminders, it has not been able to bring financial discipline. Often procedural delays were cited as reason for the last minute rush for finances.”

Commenting on the lack of planning and execution, CAG said, “Of the total savings of Rs 53,936.43 crore that was surrendered by various departments, Rs 53,225.98 crore (98.7 per cent) was surrendered on the last two days of the financial year.”

The report remarks that in the wake of last minute surrender of funds, there was no scope for utilising them for other developmental plans.

Citing several instances of poor implementation, it noted how saving of Rs 1139.03 crore occurred under the Grant Pensions and other Retirement Benefits (revenue voted) but no part of it was surrendered by the department. In 62 cases, Rs 48,114.32 crore was surrendered on the last two working days of the financial year indicating inadequate financial controls and non-availability of these funds for other development plans.

While recommending all the departments to adopt more realistic budget estimates, it emphasises on actual requirements to avoid excesses or large savings.

It emphasised that surrender of unspent funds should be done much earlier and disallowed in the last month of financial closure. It recommended that the release of funds in the last month be avoided.

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