E-Paper
Revenue deficit in T’gana for 2nd year in row: CAG
The overall revenue receipts in 2020-21 was ₹1,00,914 crore, which was marginally lesser than the previous year figures of ₹1,02,544 crore, the report said.
An overall economic slowdown coupled with the impact of Covid-19 pandemic has made Telangana a revenue deficit state during 2020-21— second consecutive year — the Comptroller and Auditor General (CAG) said in its report, tabled in the state legislature assembly on Tuesday.
As per the report, the state’s revenue receipts came down by ₹1,630 crore, while revenue expenditure shot up by ₹14,414 crore in 2020-21 compared to the previous year.
“For the second consecutive year since the formation of Telangana, the state recorded a revenue deficit of ₹22,298 crore in 2020-21. The deficit was ₹ 6,254 crore in 2019-20,” the CAG said.
The CAG pointed out that the Telangana government had made an excess expenditure of ₹24,998 crore more than the approved budget of ₹1,82,959 crore and a supplementary provision of another ₹ 26,131 crore, thereby taking the overall expenditure to ₹ 2,34,088 crore.
The CAG also rapped the state government for incurring expenditure without budget provisions. In 2020-21, the state spent ₹1,247 crore for various purposes without making any such provision in the budget.
“This has been a consistent trend in the state government, which is in contravention of the constitutional provisions. Since 2014-15, the Telangana government has made such excess expenditure of ₹1,32,547 crore, without taking the mandatory budget approval from the assembly and it is yet to be regularised,” the report said.
The state’s own tax revenue during the year was ₹66,650 crore and non-tax revenue was ₹ 6,101 crore due to lockdown and other restrictions on account of Covid-19. The state received a compensation of ₹5,483 crore towards revenue loss due to GST implementation, partly as grants ( ₹3,103 crore) and partly as back-to-back loans ( ₹ 2,380 crore) from the Centre. The central taxes recorded a fall of ₹12,692 crore but there was an increase in grants-in-aid, which stood at ₹15,471 crore during 2020-21.
The overall revenue receipts in 2020-21 was ₹1,00,914 crore, which was marginally lesser than the previous year figures of ₹1,02,544 crore, the report said.
With regard to the revenue expenditure of ₹1,23,212 crore during 2020-21, it has increased sharply, in comparison to previous year ( ₹1,08,798 crore) while capital expenditure ( ₹15,922 crore) has decreased from preceding year ( ₹16,859 crore). The increase of revenue expenditure over the preceding year was mainly due to payment to power utilities towards agriculture subsidy, schemes like Rythu Bandhu, Covid-19 pandemic relief works and so on.
The auditor also pointed out that the budgetary allocations made to certain departments were not spent completely during the years. For example, during 2020-21, the municipal administration and urban development did not spend more than ₹1,000 crore from the allocated amount of ₹ 7,547 crore.
This is also true of housing and social welfare, where the sanctioned amounts were not spent during the year, the report said. “For Hyderabad Urban Agglomeration, the entire amount of ₹10,000 crore remained unspent. Out of ₹6,225 crore provided towards scheme for debt relief to farmers, only ₹ 213 crore was spent, while only ₹550 crore was spent on the construction of two-bedroom housing scheme, out of the allocated ₹5,000 crore,” the CAG said.
The CAG also pointed out that the state government had to resort to more Ways and Means Advances — taken from Reserve Bank of India — to bridge the gap between receipts and expenditure for day-to-day business of the government. During 2020-21, the state borrowed ₹ 69,453 crore from the RBI under Ways and Means Advance, compared to ₹37,247 crore in the previous year.
The CAG further said the state is increasingly dependent on borrowing of loans, rather than exploring other resources to raise revenues. The total outstanding debt of the state government at the end of 2020-21 was ₹2,78,018 crore.
“The public debt receipts forms the major portion (53.59%) of the resources of the state government, which is more than half of the resources. More than one fourth of the state’s disbursements are on repayment of public debt,” the CAG said.
State finance minister T Harish Rao said the state government was resorting to open market borrowings only for the sake of welfare and developmental works. “Our borrowings are well within the prescribed limits under Fiscal Management and Budgetary Management Act,” he said.
Stating that the percentage of borrowings in Telangana was only 27% of the Gross State Domestic Product, Rao said there were at least 23 states whose borrowings were much higher. “The percentage of borrowings in Punjab is 49.1, while it is 42% in Rajasthan,” he pointed out.
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