Relaunching old pension scheme potential source of fiscal risks for states, says CAG

Addressing the 30th Biennial Conference of Accountants General, Murmu said: “The fiscal health of Indian states is a relevant issue that warrants careful assessment.”

“In our State Finance Audit Reports, we have been consistently highlighting risk factors that impact state finances, such as increasing committed expenditures, rising outstanding public debts and liabilities, low mobilisation of own resources comprising revenue from tax and non-tax sources and high arrears in revenue collection. Negative trends in various deficit parameters under the Fiscal Responsibility & Budget Management Act, non-achievement of Medium Term Fiscal Plan Targets are among the other concerns,” Murmu said.

He said: “Our State Finances Audit Reports have carried out in-depth analysis in regard to concerns relating to component-wise debt trends, components of the fiscal deficits of states and the debt maturity profiles of various states. We have also been reporting on debt sustainability indicators and trends.”

“The RBI and the 15th Finance Commission have also taken note of the potential sources of fiscal risks for Indian states, including declining own tax revenue, relaunching of old pension schemes in some states, rising dues of loss-making power distribution companies and the periodic disbursal of farm-loan waivers and subsidies,” he said.

Murmu also highlighted the need for ensuring unhindered access to all records, including electronic records required for audit, to ensure Parliamentary scrutiny through CAG’s oversight.

“In the ongoing era of e-governance, wherein large sets of data are being digitalised, concerns, if any, in regard to privacy and data security, can undoubtedly be met by working out suitable modalities,” he said.

“We also need to actively work with the departments concerned to sort out any obstructions in accessing records in a time-bound manner so that the Parliamentary mandate of scrutinising executive action is not affected in any manner,” he added.

Murmu’s remarks assume significance in view of ongoing debate on the old pension scheme. Congress-ruled two states— Rajasthan and Chhattisgarh — have already decided to implement the OPS, while the party has promised to restore it in Gujarat and Himachal Pradesh. Aam Aadmi Party has said that it would do so in Punjab. Jharkhand, too, decided to revert to the old pension scheme.

The old pension scheme was discontinued by the then NDA government in 2003. Former NITI Aayog Vice Chairman Arvind Panagariya has described as “immoral” poll promises such as reviving OPS, which will result in financial burden for governments.