CAG reports on states: From Gujarat’s warning of a ‘debt trap’ to the abysmal distress of Bihar hospitals

The audit reports of the Comptroller and Auditor General of India (CAG) on various states have been tabled in their respective assemblies in recent days. Here is an overview of the main findings of the CAG reports on Gujarat, Bihar, Maharashtra, Kerala and Odisha:

Gujarat

Highlights of the CAG report, which was tabled in the Gujarat Assembly on March 31, are as follows:

* Warns the state government not to fall into the ‘debt trap’ and advises it to develop a ‘well thought out borrowing and repayment strategy’ to avoid it. Stresses that the government should pay 61% of the total debt over the next 7 years, which could strain its resources.

*Without mentioning the Covid pandemic, the CAG report states that in 2020-21, Gujarat recorded a revenue shortfall for the first time since 2011-12. And that the government had underestimated the revenue shortfall by Rs 10,997 crore.

* Under the Pradhan Mantri Gram Sadak Yojana, the state in 2020-21 revised its targeted route length by a third and ended the year with 54% of released funds unspent.

* Says that Gujarat State PSUs have accumulated losses of Rs 30,400 crore and notes that the government continues to invest in them like Gujarat State Road Transport Corporation and Gujarat State Petroleum Corporation, although their net worth has completely eroded.

* Highlights that grants provided by the state government doubled in five years to Rs 22,141 crore at the end of 2020-21.

Bihar

The Bihar CAG report for 2020 was tabled in the State Assembly on March 30. Its main conclusions are as follows:

* Three of the five sampled district hospitals were 52-92% short of beds and none of them had an operating room, while the intensive care unit was only available in one of them between them. Four hospitals in encephalitis-prone areas had no testing facilities for Japanese encephalitis.

* Under the Namami Gange Scheme, sewage treatment planning in Patna was inadequate as the licensed capacity of sewage treatment plants (STPs) was only able to treat half of the sewage.

* Arrears as of March 31, 2020, with respect to the main heads of revenue, amounted to Rs 4,584.73 crore, of which Rs 1,357.78 crore had been outstanding for more than five years.

Maharashtra

The main findings of the CAG report on Maharashtra, which was tabled in the State Assembly last week, are as follows:

* The Maharashtra government’s implementation of the centrally sponsored Rashtriya Uchchatar Shiksha Abhiyan (RUSA) has been fraught with pitfalls and ineffective oversight. Against the total grants (central and state) of Rs 376.97 crore, the government could only spend Rs 283.07 crore, leaving an unspent balance of Rs 93.90 crore.

* A significant portion of a market building constructed by the Municipal Corporation of Greater Mumbai (MCGM) under the housing reservation scheme was unused or vacant. The MCGM builds, maintains and regulates public markets for the sale of fruits, vegetables, meat, etc.

Progress in rehabilitating existing dilapidated markets and rehabilitating traders has been poor.

* Construction of sewage treatment plants in a prohibited area, which had to be demolished, resulted in unnecessary expenditure of Rs 3.25 crore.

* Delay in granting revised administrative approval to an incomplete hydropower project, for which an expenditure of Rs 250.03 crore was incurred, resulted in funds being frozen for more than six years.

* Lack of coordination between the Mumbai Slum Improvement Board, Collector, Mumbai Suburban District and MCGM has led to the idleness of the multipurpose center built at a cost of Rs 5.71 crore at Ramabai Ambedkar Nagar, Ghatkopar (East ), Mumbai for more than five years. years.

* Incorrect estimate of taxable income and consequent short payment of withholding income tax resulted in avoidable interest payment of Rs 2.36 crore for the 2017-18 financial year.

* Failure to acquire land for canal construction resulted in unsuccessful expenditure of Rs 15.20 crore for dam construction.

Kerala

These are the highlights of the CAG report for 2020-2021, which was recently tabled in the Kerala Assembly.

* Kerala’s budget deficit increased from Rs 26,448.35 crore in 2016-17 to Rs 40,969.69 crore in 2020-21.

* The increase in the budget deficit of Rs 17,132.22 crore in 2020-21 compared to the previous year was mainly due to the net effect of the increase in the income deficit (Rs 11,334.25 crore), decrease in non-debt related capital revenue (Rs 24.83 crore), increase in capital expenditure (Rs 4,434.85 crore) and increase in loan and advance disbursements (Rs 1,338.29 crore).

* 60.94% of total revenue expenditure was incurred on incurred expenditure – on wages and salaries (Rs 28767.46 crore), interest payment (Rs 20975.36 crore), pension payments (Rs 18942 .85 crore) and grants (Rs 6547.48 crore).

* Outstanding government debt at the end of 2020-21 was Rs 2,05,447.73 crore, comprising internal debt (Rs 1,90,474.09 crore) and central government loans and advances (Rs 14,973.64 crore).

Odisha

The CAG report was tabled in the Odisha Assembly on March 31. The main findings of the CAG performance audit on surface irrigation and its audit of state finances are as follows:

* The CAG report finds that incomplete irrigation projects since the 1980s have seen cost increases ranging from 182% to 4,596%. Of the seven projects audited, three have been completed to date. The total initial cost was estimated at Rs 955.73 crore. However, the revised estimate stands at Rs 19,103.63 crore, of which Rs 12,742.11 crore has been spent so far. Even though the amount spent represents 66.69% of the revised total cost, the area covered is only 24% of the target area. So far, the irrigation projects have covered 1,22,418 hectares against a proposed area of ​​5,02,842 hectares.

* Odisha government tax revenue (Rs 1,04,387 crore) constituted 20.49% of the state’s gross domestic product (Rs 5,09,574 crore) in 2020-2021. State Tax Expenditure (Rs 95,311 crore) accounted for 18.70% of the GSDP for 2020-21, which decreased by Rs 3,826 crore (3.86%) from 2019-20 (99,137 crore). crores of rupees).

* In 2020-2021, the total savings to the state was Rs 43,554.13 crore, of which Rs 32,556.37 crore (74.75%) was handed over on the last day of the year, that is- i.e. March 31, 2021. The remaining savings of Rs 10,997.76 crore (25.25%) were not returned in 2020-21.

West Bengal

Here are the highlights of the CAG report tabled in the West Bengal Assembly on March 28:

* In March 2020 and February 2021, the Government of Bengal amended the FRBM Act regarding the targets for the six-year period from 2019-20 to 2024-25 prospectively. State budget parameters, as reflected in its revenue and budget deficits, were negative during the 2016-21 period. The state also recorded primary deficits during the 2017-21 period.

* The state’s liabilities have increased year on year and more than 58.84% of market borrowing in 2020-21 has been used to balance its revenue account, which has led to restricting the creation of assets.

* The outstanding public debt of the State at the end of 2020-21 increased by 12.92%. Over the next three, five and seven years, the debt maturity will be 15.49, 26.60 and 41.42%, respectively, of the total outstanding government debt (Rs 4.24,247 crore ).

* With respect to 65 Autonomous Agencies (SOs) that were required to report their annual accounts to the CAG, two District Legal Services Authorities (DLSAs) have not submitted accounts since their establishment in 1998-99. As of September 30, 2021, 288 AB annual accounts due until 2020-21 remained outstanding. This points to “inadequate internal controls” and a “deficient oversight mechanism” of various state government departments.


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John A. Bogar