VIJAYAWADA:The CAG report on State finances for the 2016-17 fiscal tabled in the Andhra Pradesh Legislative Assembly on Friday, observed that capital expenditure (Rs 15,143 crore) was less than the budget estimates (Rs 15,388 crore) and its ratio to total expenditure stood at 11.48 per cent which was much lower than the combined average (19.7 per cent) of general category States.
As per the audit findings, devolution to the State had enhanced to the tune of Rs 4,370 crore during 2016-17 on the basis of 14th Finance Commission recommendations. The audit noted that additional devolution led to increase in revenue expenditure and not on capital formation.
The government earned a meagre return of Rs 4 crore in 2016-17 on its investments of Rs 8,975 crore in various corporations and companies. The average rate of return on investments was negligible at 0.05 per cent during 2016-17, it observed. The maturity profile of debt as on March 31, 2017, indicated that the State would have to repay more than 50 per cent of debt amounting to Rs 76,888 crore within the next seven years which might put a strain on the government budgets during that period.
The State government released an amount of Rs 8,256.01 crore for taking over the liability under the UDAY scheme leaving the balance loans to the tune of Rs 6,464.3 crore. Bank and financial institutions had not issued any new bonds as stipulated in the UDAY scheme for the remaining balance loans of DISCOMs, it observed.
Though the State government in its Macroeconomic Framework Statement targeted to reduce fiscal deficit to 3 per cent of GDP as against 3.25 per cent, the fiscal deficit (Rs 30,908 crore) at 4.42 per cent of GSDP was still more than the prescribed limit.
Revenue expenditure (Rs 1,16,215 crore) at 16.62 per cent of GSDP was more than the budget estimates (Rs 1,14,168 crore). During 2016-17, 85.17 per cent of the revenue expenditure was met from revenue receipts and the balance was from borrowed funds, thus registering a revenue deficit of Rs 17,231 crore. This is fraught with the risk of progressive weakening of State finances over a period of time, the CAG observed.
According to it, the State has not amended its FRBM Act, 2005, as per the recommendations of the 14th Finance Commission at the end of March 2017.The CAG also observed that excess expenditure over the allocation amounting to Rs 53,673.19 crore pertaining to the years from 2004 to 2016 was yet to be regularised as of November 2017. Excessive/unnecessary/inadequate re-appropriation of funds was also observed. Analysis showed that out of 10,041 items of re-appropriation made by the State government during 2016-17, specific reasons were not intimated in respect of 8,503 items (84.68 per cent).