TS pumped up revenue surplus, CAG exposes deficit of `5,392cr
Auditor says state showed loans as revenue; breached fiscal deficit norms
The Comptroller and Auditor General (CAG) has been very critical of the TS government's financial management and financial indiscipline, suggests audit reports tabled by the government in the Assembly on Thursday.
Against the TS government’s claim of surplus budget in the financial year 2016-17, the CAG report commented that the revenue surplus was overstated by `6,778 crore on account of irregular accounting. Thus the state had a revenue deficit of `5,392 crore in 2016-17.
The fiscal deficit (`35,281 crore) which stood at 5.46 per cent of Gross State Domestic Product (GSDP) was understated by `2,500 crore due to crediting of borrowed funds as revenue receipts.
The CAG said that the ratio of fiscal deficit to GSDP, excluding the amount transferred under Ujwal Discom Assurance Yojana (UDAY) scheme (`7,500 crore), was 4.3 per cent. This exceeded the ceiling of 3.5 per cent stipulated for 2016-17 by the 14th Finance Commission and targeted in the medium term fiscal policy statement of the state under Fiscal Responsibility and Budget Management (FRBM) legislation.
CAG said that under UDAY scheme, against `8,931.51 crore borrowed through UDAY bonds during the year, the state government released `7,500 crore only to Discoms at the end of the year. The entire amount transferred to Discoms has been booked under capital expenditure as equity.
The Comptroller and Auditor General (CAG) of India has highlighted how four irrigation projects in Telangana which were shortlisted by the Centre under the Accelerated Irrigation Benefits Programme (AIBP), remain incomplete after over a decade, even though the deadline for their completion was two years.
Three of the four irrigation projects are major projects – the Devadula Lift Irrigation Scheme, Stage 2 of the Sriramsagar Project, and the Indiramma Flood Flow Canal – while one is a mediumsized project – the Palemvagu Project.
As per the AIBP guidelines of 2006, the Government of India was supposed to provide Central Assistance to cover 25 per cent of the project cost for shortlisted projects, while the state was supposed to bear the remaining 75 percent.
The objective was to create irrigation facilities for 12.95 lakh acres of land through the projects. However, as of March 2017, only 45 per cent of that area, 5.77 lakh acres, was irrigated. Also, total utilisation was just nine percent with nil utilisation for Sriramsagar and Indiramma Flood Flow canal due to shortfall in availability of water.
The CAG emphasised how `4,711 crore had been spent on the Indiramma Flood Flow Canal, but the project had failed to provide any irrigation facilities because the required reservoirs had not been completed.
The Devadula and the Sriramsagar did not receive the total funds from the Centre because of the slow incurrence of expenditure. According to the government, the slow progress was a result of delays in land acquisition, inter-departmental issues and unforeseeable ground conditions for excavation.
The CAG report stated that additional items of work had been taken up due to the shortage of water and they had increased the financial burden. Changes in the scope of work had also caused project costs to rise.
The CAG also reviewed the implementation of Mission Kakatiya, from the launch of the mission to March 2017. It checked works on 145 tanks in 15 divisions which cost nearly `96 crore.
The aim of Mission Kakatiya is to restore all 46,531 tanks in the state in five years. The restoration of 21,670 tanks by August 2017 was proposed; however, only 28 per cent of them, 7901 tanks, were restored.
The removal of silt is an important component of the restoration works. When asked about shortfalls in the removal of silt, the state government said that farmers were not interested in taking the silt because it was not useful for agriculture.
The CAG said that this report was not acceptable as guidelines prescribed priority was to be given to tanks were farmers agreed to transport silt.
It also observed that nopriority tanks and mini tank bunds, which are primarily used for recreational purposes, were taken up for restoration in the first and second phases of the project.
The restoration works are supposed to irrigate 10 lakh acres of gap ayacut. The CAG observed that there was no mention of the gap ayacut in the estimates for the individual works.
The objective was to create irrigation facilities for 12.95 lakh acres of land through the projects. However, as of March 2017, only 45 per cent of that area, 5.77 lakh acres, was irrigated.