CAG unhappy with fiscal management,points imbalances

* There has been lapses in the implementation of MNREGA — some statutory priorities have been ignored. Out of the total Rs 1008.87 crore,nearly Rs 471 crore have been spent on low priority works related to road construction.

* The resource-starved state has lost Rs 1,521 crores on account of under-assessment of different taxes,including Sales Tax in 2009-10. During the year,the state government had received Rs 8,61.63 crore as the state’s share from the central taxes and another Rs 5,126 crore as grant-in-aid from the Centre,which constituted 58 per cent of the total revenue receipts. Yet,the fiscal liability of the state has grown at alarming rate — from Rs 17,432 crore to Rs 23,713 crore in 2010.

* The 13th Finance Commission had recommended a target to reduce the consolidated debt stock to 25 per cent by 2014-15. Thus,a high debt of Rs 23,713 crores — which is 56 per cent of the Gross State Domestic Product (GSDP) — requires the state to take some serious steps to fiscal corrections. The state government cannot escape the responsibility of meeting the condition.

* High expenditure of Rs 4,788 crore only on salaries and wages during 2009-2010 — Rs 1,977 crore (almost 70 per cent) more than the projected Rs 2,811 crore. The salary expenditure has arisen to 61 per cent of the revenue expenditure,net of interest and pension payments — again 35 per cent higher than what was recommended by 12th Finance Commission.

* Pension payments have been increased by 101 per cent — Rs 670 crore in 2005-06 to Rs 1,348 crore — and is expected to increase further to create further financial imbalance.

* The CAG has taken exception to delays in setting up of a sinking fund as recommended by the 12th Finance commission for amortisation of market borrowings as well as other loans and debt obligations.

* There have been insignificant returns from the Rs 2,663 crore invested by the government in PSUs,rural banks and joint stock companies and high cost borrowings raised during 2005-2010 .

* The CAG conveyed its displeasure over the non-enactment of law for laying down the limits for guarantees on the security of the consolidated fund of the state.