The government with a debt of Rs 3,95,858 crore has failed to utilise the higher borrowings for the development of the state.
The Comptroller and Auditor General (CAG) report, which was tabled in the state legislature assembly Friday, states: “The average expenditure on debt-servicing during 2017-18 was Rs 30,652 crore, which accounted for 89.1 per cent of average public debt receipts during the same period, implying that a larger percentage of debt was being used for debt-servicing. This also indicated that portion of the debt available for meeting developmental expenditure to promote growth was insignificant.”
The report has recommended the state government prioritise its spending on creation of more capital assets and expressed concern over the decline in capital.
While urging the government to initiate measures to ensure better value for money in investments, it warned against high-cost borrowed-funds invested in projects, which bring low financial returns.
The report pointed as against the projected revenue deficit of Rs 3,645 crore made in the budget estimates 2016-17, the actual deficit was Rs 8,536 crore due to gap between growth rates of the revenue receipts (11 pc) and revenue expenditure (12 pc) over previous year.
This fiscal deficit (Rs 33,657 crore without UDAY) increased as compared to the previous year and constituted 1.5 pc of GSD. The primary deficit during 2016-17 was Rs 5,125 crore.
The state government subsidies to various schemes increased by 18 per cent.
The expenditure on salaries and wages declined. But allocations to local bodies which accounts for 47 per cent of revenue expenditure during (2016-17) increased by 18 per cent .
The capital expenditure, which constituted 10 per cent of the total expenditure increased by 12 per cent during 2016-17 over the previous year, however the same less than the original budget estimates of 2016-17 by Rs 5,457 crore (18 pc).
The CAG indicated that government would have to mobilise the resources for repayment of Rs 43,952.10 crore (an increase of Rs 30,235.04 crore) compared to the period (2016-18) during the period 2018-20.
Unless there is a definite plan to meet this liability the resources available for development may shrink.
Chief Minister Devendra Fadnavis said, “A sizeable capital investment was being routed in the projects like Samruddhi Corridor, airport, railways and metros which are undertaken through special purpose vehicle. As a result this sizeable capital component does not get accounted or reflected in the overall budget.”
Therefore, overall it appears there is shrinking of the capital investment in development growth, he said.