Karnataka borrowed heavily, used funds for capital expenditure: CAG report

Gender budget allocation up, but not based on data; govt firms fail to remit interest earned  

Published: 16th September 2021 04:46 AM  |   Last Updated: 16th September 2021 04:46 AM   |  A+A-

RDPR Minister KS Eshwarappa speaks in the Assembly on Wednesday

By Express News Service

BENGALURU: The Karnataka government resorted to huge market borrowings of Rs 48,499 crore during the financial period 2019-20, resulting in 57 per cent increase in cash balance for the current year at Rs 34,464 crore, compared to Rs 22,004 crore the previous year, the Comptroller and Auditor-General observed in its State Finance Audit Report. The report was tabled in the assembly on Wednesday. 

Off-budget borrowings made up 5 per cent (Rs 18,103 crore) of the total liabilities of Rs 3,37,520 crore in 2019-20, and capital expenditure of Rs 39,599 crore included Rs 1,194.23 crore towards serving the principal budget borrowings. The CAG noted that capital expenditure is basically incurred from borrowings. Though the state incurred huge borrowings, increase in capital expenditure over the previous year was a meagre one per cent.

However, the share of capital expenditure is 19 per cent of total expenditure. The CAG noted that as against the initial budgeted cost of Rs 4,358.06 crore, in respect of 978 works stipulated to be completed on or before March 2020, progressive expenditure was Rs 2,341.06 crore.

Of 978 projects which were incomplete as on March 31, 2020, 20 per cent had remained incomplete for more than three years. This not only resulted in cost and time overrun, but the state government also had to bear extra burden in terms of servicing debt and interest liabilities on borrowings incurred towards implementation of these projects.

The CAG noted that although the budget “enhanced its allocation towards gender budgeting every year, the gender budget process lacked overall analysis, gender data and monitoring mechanism. The efforts of the government stagnated at bringing out documents that only attempted to quantify allocations earmarked for women and girls...” The CAG made other observations too. “In test checked cases, under 11 grants and 9 object heads, the supplementary provision of Rs 340.97 crore proved unnecessary, under 14 grants and 12 object heads, supplementary provision was excessive as there was unspent provision of Rs 1,680.15 crore.

In 12 grants/appropriation, the entire unspent provision of Rs 5,369.27 crore was not surrendered. In test checked cases, the interest earned on Government Grants to an extent of Rs 803.99 crore was not remitted to the Government Account by 10 Government Companies/Corporations. As at the end of March 2020, Rs 4,221.56 crore was lying in the PD Accounts of the administrators...”

The CAG noted that expenditure under education and health in 2019-20 was below that of other states. Analysis for  2014-15 to 2019-20 showed that priority towards education had decreased up to 2018-19, and there was no significant variance in priority towards health. In 2019-20, there was slight increase in allotment for education, but decrease in priority for health. “In 2019-20, as against provision of Rs 2,63,804.67 crore, expenditure of Rs 2,33,978.23 crore was incurred, resulting in unspent provision of Rs 29,826.44 crore under 29 grants/appropriation,’’ the report noted.


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