The Gujarat government needs to be more careful in preparing state budget and strengthen budgetary controls in those departments where savings or non-utilisation have been persistently reflected over the years, the comptroller and auditor general of India (CAG) has said in its latest report.
As per the report on state finances for 2012-13, which was tabled in the Gujarat assembly on friday, 'expenditure' of Rs. 99,150.38 crore was incurred against total grants and appropriations of Rs. 1,07,439.38 crore, resulting in savings of Rs. 8,288.60 crore.
The CAG was referring to the savings or non-utilisation of more than Rs. 5 crore (in each scheme) consistently for the last three years in respect of 44 government schemes taking grants from centre.
These schemes listed by CAG include those of intensive cotton production programme implemented by state agriculture department. Against the grant of Rs. 55.38 crore, only Rs. 5.67 crore were spent during 2010-13.
In another case, due to the non-commencement of construction work of government-run polytechnic colleges under PPP model, only Rs. 3 crore were spent from the total grant of Rs. 50 crore, said the report.
Similarly, the state government failed to utilise central grant meant for Kalpsar and Bhadbhoot barrage project between 2010 and 2013. Out of the provision of Rs. 122.41 crore towards survey and investigation in Irrigation department, Rs. 90.10 crore could not be spent due to non-commencement of these two projects, said the report.
Due to administrative non-approval, Gujarat government's road and building department could not utilise Rs. 708.82 crore out of total grant of 1394.85 crore, the CAG pointed out.
The Gujarat government needs to review the formulation of budget estimates and provisions in these grants, it observed.
The CAG cited two possible reasons behind the failure of state government in utilising these grants.
Either the provisions were excessive or the executive was not successful in implementing the legislative aspirations, it said.
In another major observation, CAG stated that Gujarat's fiscal liabilities are increasing over the years.
"The outstanding fiscal liabilities have shown a steady increase over the years...from Rs. 1,05,652 crore at the end of 2008-09 to Rs. 1,66,667 crore at the end of 2012-13," said the report and warned the government of unsustainable debt situation if things don't change.
"The increasing fiscal liabilities accompanied with negligible rate of return on government investment and inadequate cost-recovery of loan advances might lead to a situation of unsustainable debt situation in the medium or long run," the CAG said.