PORVORIM: The State’s fiscal position under Laxmikant Parsekar was not sound, as the Comptroller Auditor General (CAG) has indicated fiscal imbalances in the finances for the financial year 2015-16.
The CAG, in its report for the year ending March 2016, that was tabled on the floor of the House said the State’s fiscal position had declined and recommended fiscal correction.
“The fiscal position of the State had declined in terms of the key paramters as compared to the previous year. The fiscal parameters like revenue, fiscal and primary deficits indicate the extent of overall fiscal imbalance in the finances of the State government during the specified period,” the CAG report states.
The audited report said that during 2015-16, revenue surplus was Rs 132 crore less than the previous year’s surplus of Rs 279 crore due to reduced growth of receipts as compared to expenditure.
“This was due to increase of Rs 1,010 crore (13.63 percent) in revenue expenditure as against the increase of only Rs 863 (11.22 percent) in revenue receipts over the previous year,” the report stated.
The CAG reported that due to increase in fiscal deficit, which represents total borrowings of the State that is total resource gap, increased steadily during the period 2011-14. “Thereafter, movement of gross fiscal deficit declined to Rs 948 crore,” it added.
“Fiscal deficit during 2015-16 increased to Rs 1,483 crore from Rs 948 crore in 2014-15. Due to increase in the fiscal deficit by 56.43 percent and interest payment by 6.64 percent, the primary deficit increased to Rs 408 crore in 2015-16 from a primary surplus of Rs 60 crore in 2014-15,” the CAG noted.
“The deficit in the government accounts represents the gap between its receipts and expenditure,” it added.
The CAG pointed out that during the last five years, market borrowings and net accretion in public account, were the main source utilised by the government to finance the fiscal deficit.
“During 2015-16, while 87 percent of the fiscal deficit was financed through net market borrowings that it is Rs 1,285 crore, the balance amount was financed through accretions in small savings, reserve funds, loans from Government of India and financial institutions,” it said.
The auditor further revealed that during the FY 2015-16, government raised Rs 1,450 crore as market loans, Rs 121 crore from National Bank for Agriculture and Rural Development and Rs 165 crore from national small savings. Government also received loan amounting to Rs 112 crore from the Union Government.
The CAG has pointed out that the State managed to keep fiscal deficit relative to GSDP to 2.44 percent which was within the limit of 3 percent fixed by the GFRBM (first amendment) Act, 2014.
The ratio of interest payments to revenue receipts has been contained at 12.58 percent as against the level of 12.86 percent prescribed by the 14th Finance Commission.
CAG has recommended that the government make efforts to improve the quality of fiscal consolidation by incentivizing revenue generation, reducing committed liabilities and improving quality of expenditure.
