TS to reclaim `10K cr from 28,000 deposits

Telangana has the highest number of PD accounts

The state government would close about 28,000 personal deposit accounts (PDAs) opened by various departments in which over `10,000 crore is lying unused for the past few years.

A scrutiny done by the finance department has revealed that the departments had opened the accounts in violation of norms. With the state government facing a funds crunch due to the Coronavirus-induced financial crisis, the finance department is exploring all the options to mobilise funds ahead of Budget 2021-22.

The scrutiny found that TS government tops the country in having the highest number of PD accounts at 28,087 in which `10,873 crore is lying unused. Though there are other states with higher PD accounts, they stand nowhere nearer to Telangana state. The other states with higher PD accounts include Odisha (827), Gujarat (478), Tamil Nadu (201), West Bengal (153) and Haryana (124).

On the one hand, the state government is borrowing at an average interest rate of 7.40 per cent to fund various welfare schemes and development programmes. On the other, the state government is not getting any benefit towards interest on deposits accrued in Personal

Deposit accounts. In this way, the government is suffering dual financial losses.

As per norms, funds deposited in PD accounts should be credited into the state government account if they remained unused for more than three years. But it was found that these norms were never followed.

The Comptroller and Auditor General of India (CAG) too in its reports every year was finding fault with the state government for continuing with such a large number of PD accounts.

“Paying interest at higher rates (7.40 per cent) on borrowings while keeping huge amount in PD accounts was a glaring example of poor cash and financial management of the state government,” the CAG said and found the incidence of non-re-conciliation was 67 per cent (`73,783cr) of total expenditure and 77 per cent (`55,116 cr) of total receipts”.

“It will lead to a risk of non-detection of leakages in revenue and irregularities in expenditure,” CAG said.

CAG recommended the finance department to review all the PD accounts and ensure that the amount unnecessary lying in these accounts are immediately remitted to the consolidated fund and all the inoperative deposit accounts are closed.