Andhra Pradesh government incorrectly booked Rs 713.14 crore: CAG

According to CAG, GSDP increased by 9.65% in 2022-23 compared to the previous year, whereas an increase in revenue receipts was 4.79%.
Andhra Pradesh legislative assembly.
Andhra Pradesh legislative assembly. (File Photo)

VIJAYAWADA: The CAG report for 2022-23 tabled in the Andhra Pradesh Legislative Assembly on Thursday, observed that the State government during the financial year has incorrectly booked an expenditure of Rs 713.14 crore under the capital section instead of the revenue section, which led to the understatement of revenue expenditure of the State.

The impact on revenue expenditure of misclassifications/non-compliance to statutory provisions on the State’s finances was net understatement of revenue expenditure to the tune of Rs 1,816.76 crore (Nonpayment of interest under Reserve Funds and Deposits - Rs 536.09 crore, short contribution of government towards NPS - Rs 539.94, and short transfer of cess - Rs 27.59)

CAG observed that the State government did not furnish information on committed liabilities and also did not disclose its off-budget liabilities in the budget documents.

According to CAG, non-freezing of accounts by treasuries after closing monthly accounts may give scope for data manipulation after submission of monthly accounts to the AG office and may lead to mismatch of figures/data between AG office and the State government.

It was observed that in AP, there is no provision for freezing of monthly accounts in CFMS (Comprehensive Finance Management System) after closure of monthly accounts and sending them to the Office of Accountant General (Accounts & Entitlements).

According to the CAG report, the Reserve Bank of India (RBI) extends Special Drawing Facility/Ways and Means Advances to enable the State government to tide over temporary shortfalls in the minimum cash balance (Rs 1.94 crore) which the State government is required to maintain with the RBI.

During 2022-23, the State government availed ways and means advance of Rs 1,18,039 crore on 341 days (166 days of Ordinary Ways and Means Advance, 23 days of Special Drawing Facility and 152 days of Overdraft) and the same Rs 1,18,039 crore was repaid during the year leaving ‘Nil’ balance at the end of the year. Further, a sum of Rs 149 crore was paid as interest on the Ways and Means Advances during 2022-23.

Overdraft is taken from the RBI when the minimum cash balances fall below Rs 1.94 crore, even after taking Ways and Means Advances. In 2022-23, the government availed overdraft from the RBI for 152 days amounting to Rs 57,066 crore.

CAG said the State has achieved the set fiscal targets as required under the AP Fiscal Responsibility and Budget Management (FRBM) Act. In 2022-23, the State’s revenue deficit was Rs 43.487 crore and the target was to become revenue surplus (3.3 or less per cent of GSDP) and it had achieved 3.3%. In case of fiscal deficit (Rs 52,508 crore), the target was 4.5% or less and the State recorded 3.9% and in case of debt and other obligations (Rs 4,29,526 crore), the target was 36.3% or less and it achieved 32.60%.

According to CAG, GSDP increased by 9.65% in 2022-23 compared to the previous year, whereas increase in revenue receipts was 4.79%.

It was noted that State’s own tax revenue was being maintained at 6% of GSDP from FY 2019 to 23. While the State’s own tax collection increased from Rs 58,031 crore in FY 19 to Rs 78,026 crore in FY 23, devolution of Union Taxes increased from Rs 32,787 crore to Rs 38,177 crore during the same period.

The public debt is discharged through the use of the revenue surplus. In 2022-23, even though the State government has revenue deficit of Rs 43,487 crore, it discharged a public debt of Rs 15,570 crore. Capital expenditure during 2022-23 amounting to Rs 7,244 crore (0.55% of GSDP) fell short of the budget estimates by Rs 23,436 crore. The public debt and other liabilities showed a net increase of Rs 51,440 crore (113.81%) over the previous year due to raising of new market loans. In FY 22, it was Rs 3,73,503 crore and increased to Rs 4,23,942 crore in FY 23.

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