CAG slams state govt for fiscal stress

CAG report criticizes Maharashtra govt for fiscal stress due to revenue-expenditure mismatch, low capital spending, and inadequate allocation for public health.

Mumbai: In a report tabled in the Maharashtra legislature on Friday, the Comptroller and Auditor General (CAG) criticised the state government for fiscal stress caused by a mismatch between receipts and expenditure.

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The state government’s revenue receipts grew from ₹2,78,996 crore in 2018-19 to ₹4,05,678 in 2022-23, while revenue expenditure during this period increased from ₹2,67,021 crore to ₹4,07,614 crore. It resulted in little or no addition to the state’s infrastructure and service network, the report stated.

The gap between revenue receipts and expenditure resulted in a revenue deficit, the report said, adding that spending on the capital account was just ₹61,644 crore or merely 13% of the total expenditure in 2022-23. The government spent just 70% of the total borrowings that year. It also resulted in the fiscal deficit increasing to ₹67,602 crore in 2022-23 from ₹23,015 crore in 2018-19.

The report further stated that the committed and inflexible expenditure (wages, pension, etc.) in 2022-23 was ₹2,67,946 crore, which is 65.73% of the revenue expenditure. An upward trend in the committed and inflexible expenditure results in lesser spending on capital creation, it added.

“Overall budget reliability assessment indicates that though the deviations between the actual expenditure and original budget as well as between the actual expenditure and the final budget was 6%, while [sic] the deviations exceeded to 25% in different grants. In several cases, there were supplementary grant [sic] where expenditure was not even the original grant. The budget practice should deal with such deviations,” the report said.

The CAG has recommended that the government make efforts to bridge the revenue gap and may consider mobilising additional resources from tax and non-tax sources.

The report also slammed the government for not spending enough of the grants allocated for public health, ecology and environment. In 2021-22, ₹768 crore was allocated for medical and public health, against which only ₹684 crore was spent. Similarly, against the allocation of ₹466 crore for ecology and environment, the actual expenditure was ₹49 crore. “The allocation for medical and public health had to be surrendered mainly due to non-release of funds, receipt of lesser bills and non-procurement of equipment. In some cases, the allocation was surrendered because of the non-release of central funds,” the report stated.

The CAG recommended that the state government formulate “a realistic budget based on reliable assumptions” that considers the needs of the various departments and their capacity to utilise the allocated resources. It added that the departments should ensure “timely submission of utilisation certificates” with respect to the grants released for specific purposes.