CAG report: HP fiscal deficit down by 9.2% in 2018-19
Himachal Pradesh’s fiscal deficit decreased by 9.2% in 2018-2019 financial year, as per the comptroller and auditor general’s (CAG’s) report tabled in the state assembly on Monday. The deficit, which stood at ₹3,870 crore in 2017-18, dropped to ₹3,512 crore , logging a decrease of ₹358 crore. Fiscal deficit, in very broad terms, is the amount an entity has to take as loan. In general, the lower it is, the better it is.
The capital expenditure ( ₹4,583 crore) increased by 22% ( ₹827 crore) over previous year’s ₹3,756 crore. The share of capital expenditure to total expenditure increased from 12% in 2017-18 to 29% in 2018-19. The primary fiscal deficit of ₹82 crore in 2017-18 was offset by a primary surplus of ₹ 510 crore in 2018-19. In the same duration, the state’s revenue receipts ( ₹30,950 crore) increased by 13% over the previous year’s ₹27,367 crore.
Only 33% of the revenue receipts came from the state’s own resources comprising taxes and non-taxes. Central transfers comprising the state’s share in central taxes and duties (18%) and grants-in-aid from the Union government (49%) brought in the remaining 67%.
The CAG report says the total expenditure, ₹34,493 crore, increased by 10% ( ₹3,181 crore) and revenue constituted 85.3% of the total expenditure. The total expenditure on four components — salary and wages, pension liabilities, interest payments and subsidies — formed 73% of the revenue expenditure.
Overall fiscal liabilities at the end of the year 2018-19 were ₹54,299 crore with a growth of 6.4% over the previous year. Fiscal liabilities were 36% of GSDP and 1.75 times the revenue receipts.
PUBLIC DEBT INCREASES
The total public debt increased from ₹25,729 crore in 2014-15 to ₹36,425 crore in 2018-19 registering annual average growth rate of 9.6%. The share of market borrowings in total public debt went up from 59%. During 2018-19, the total public debt increased 5% over previous year.
In the next ten years, of total outstanding market loans and Ujjwal DISCOM Assurance Yojana (UDAY) bonds of ₹26,573 crore, the state has to repay the principal of market loans and UDAY bonds of ₹ 25,005 crore (94.1%) and interest amounting to ₹12,521 crore.
Revenue surplus (the difference between revenue receipts and revenue expenditure) increased from ₹314 crore in 2017-18 to ₹1,508 crore in 2018-19. During 2018-19, an expenditure of ₹42,46,910 crore (90.4% was incurred against total grants and appropriation of ₹46,98,468 crore. Overall savings of ₹24,51,558 crore were the result of savings of ₹5,33,695 crore minus excess expenditure of ₹821.3 crore in various grants/appropriations, which, in addition to excess expenditure of ₹8,33,335 crore from 2013-14 to 2017-18 required regularisation of the State Legislature under Article 205 of the Constitution of India.
The CAG reports further points out of 5,758 Utilisation Certificates (UCs) due in respect of grants aggregating ₹5,128.42 crore, 2,407 UCs aggregating ₹1,898.8 crore were pending as of March 2019.
High pendency of UCs is fraught with risk of misappropriation of funds and fraud and state government must ensure timely submission of utilisation certificates in respect of grants released to grantee institutions, and may also review whether grants should continue to be given to grantees with high pendency in submission of UCc, the report states.
It points out that of 14 autonomous bodies, only three had submitted accounts for 2018-19. The state government reported 44 cases of misappropriation, loss or theft of government money amounting to ₹94 lakh up to March 2019, on which final action was still pending. Forty-one of 44 cases have been pending for over five years.