CAG comes down heavily against AP government’s finances

Non-completion of 188 projects by the deadline of March 31,2011,resulted in a cost overrun of Rs 28,505 crore in case of 43 projects. The state government claimed to have spent Rs 46,330 crore on these projects that included irrigation,roads and bridges.

“Non-completion of these projects\works within the stipulated time not only resulted in increase in cost but also deprived the state of intended benefits for prolonged periods,” the CAG report said.

On the other hand,the state’s revenue arrears increased by Rs 4,639 crore in 2010-11 to Rs 16,793 crore as compared to Rs 12,154 crore last year. The arrears include Rs 7,710 crore pending for more than five years now,the CAG said.

The loss of revenue on account of tax evasion,write-offs and refunds amounted to Rs 559 crore in 2010-11 in departments like Commercial Tax,Forest,Civil Supplies and Transport.

Referring to 48 government companies and corporations,the CAG audit report said of the total,nine companies\corporations suffered a loss of Rs 684 crore and an accumulated loss of Rs 5,282 crore. The AP State Housing Corporation Limited (Rs 2,929 crore) and AP State Road Transport Corporation (Rs 1,984 crore) were the major loss-making organisations,the CAG added.

“The state government needs to consider drawing up a roadmap for closure of loss-making PSUs in non-core areas,in keeping with the recommendations of the 13th Finance Commission,” the report suggested.

The CAG also rapped the state government for the “excess expenditure” amounting to Rs 867 crore over and above the budget provisions. It found that Municipal Administration and Urban Development Department spent Rs 514 crore,Home Department Rs 251 crore,Energy Department Rs 37 crore,Roads,Buildings and Ports Rs 29 crore and Agriculture Department Rs 11 crore in excess of the budgetary provisions.

The government also spent Rs 810 crore in different departments without any budgetary provision,the CAG noted.

“The state government’s budgetary processes have not been sound with errors in budgeting,lumpsum provisioning without clarity of purpose,excess expenditure over allocation,expenditure without budget provision. Financial rules were flouted by several departments by drawing funds in excess of requirement,resorting to re-appropriation without proper explanations and expending without provision of funds,” the CAG report said.

It suggested that the government adhere to budgetary procedures and financial rules scrupulously and ensure that the budgeting process is “more transparent and result-oriented.”