The Comptroller Auditor General (CAG) of India has pointed out that the State’s outstanding fiscal liabilities increased by 47% from 2014 to 2019. The CAG report tabled in the House on Friday said that outstanding fiscal liabilities increased from Rs 13,877 crore in 2014-15 to Rs 20,412 crore at the end of 2018-19.
The outstanding liabilities of the government at the end of financial year 2018-19 (Rs 20,412 crore) comprised internal debt of Rs 14,019 crore (69%), public account of Rs 5,192 crore (25%) and loans and advances from Gol of Rs 1,201 crore (6%).
Finances of the State Government
Fiscal correction: The growth rate of Gross Domestic Product (GSDP) was 9.48% against the FC XIV projection of 14.52% during the year.
During 2018-19, the State achieved only one of the three major parameters specified by the FC XIV – the ratio of fiscal deficit to GSDP at 2.32% was lower than the norm of 3%.
The ratio of interest payment to revenue receipt (second parameter) at 11.75% was marginally higher than the projected ratio of 11.68% prescribed by FC XIV. And, the third parameter of fiscal liabilities to GSDP ratio at 26.45% in 2018-19 was higher than the target fixed (25%) in the Goa FRBM (First Amendment) Act and 25.31% projected by FC XIV.
The State continued to maintain revenue surplus during the period 2014-19. Revenue surplus during 2018-19 stood at Rs 355 crore and was lower than the previous year’s surplus by Rs156 crore.
Resource
mobilisation
Revenue receipts at Rs 11.438 crore during 2018-19 increased by Rs 384 crore (3%) over the previous year. Though State’s own taxes increased by Rs 140 crore, the tax-GSDP ratio (6.31%) was less than the normative assessment of 8.37% made by FC XIV.
The collections under non-tax revenue fell for the first time during the last five years by Rs 159 crore over the previous year. The share of State’s own resources comprising tax and non-tax revenue to total revenue receipts was 68% while the Central tax transfers including grants-in-aid contributed 32%.
Expenditure management
Revenue expenditure increased continuously from Rs 7.410 crore in 2014-15 to Rs 11.083 crore in 2018-19 and grew by 5.12% (Rs 540 crore) during 2018-19 over the previous year. The growth rate of revenue expenditure fluctuated from 5.12% in 2018-19 to a high of 18.91% in 2017-18. Revenue expenditure of GSDP stood at 14% during 2018-19. Capital expenditure (Rs 2,149 crore) constituted 16% of the total expenditure in 2018-19. During the five-year period 2014-19, capital expenditure increased by 74%, while the total expenditure increased by 53% during the same period.
Financial assistance to local bodies and other institutions continuously increased from Rs 1,022.53 crore in 2014-15 to Rs 1,780.46 crore in 2018-19. Expenditure on Subsidies (Rs 301 crore) constituted 2.63% of revenue receipts.
As of March 31, 2019, the State Government invested Rs 631 crore in Statutory Corporations, Joint Stock Companies and Co-operative Banks and Societies. The average return on investments in these Companies/Corporations was 0.27% during 2014-19 while the Government paid an average interest ranging from 6.90% to 7.59% on its borrowings during the same period.
Quality of expenditure
The overall development expenditure to total expenditure decreased from 69.01% in 2014-15 to 67.44% in 2018-19. The State Government has given higher fiscal priority to health and family welfare during 2014-15 and 2018-19, as their ratios to total expenditure were significantly higher than that of General Category States.
Transactions under reserve funds
There were eight reserve funds earmarked for specific purposes during 2018-19 of which, two funds were inoperative with a balance of Rs 3.07 crore. The total accumulated balance in these funds as on March 31, 2019 was Rs 1,850.44 crore of which, Rs 954.18 crore was invested.
Debt sustainability
The outstanding fiscal liabilities of the State increased by 47% from Rs 13,877 crore in 2014-15 to Rs 20,412 crore at the end of 2018-19. The outstanding liabilities of the State Government at the end of financial year 2018-19 (Rs 20,412 crore) comprised internal debt of Rs 14,019 crore (69%), public account of Rs 5,192 crore (25%) and loans and advances from Gol of Rs 1,201 crore (6%).
The net availability of borrowed funds for current operations after debt redemption (principal and interest payments) increased from Rs 484 crore in 2017-18 to Rs 516 crore in 2018-19.
Financial Management and Budgetary Control
During 2018-19, expenditure of Rs 16,729 crore was incurred against the total grants and appropriations of Rs 19,024.42 crore resulting in savings of Rs 2,295.42 crore. The overall savings were the net result of savings of Rs 4,653.96 crore, offset by an excess of Rs 2,358.54 crore in one grant and one appropriation. The excess expenditure of Rs 2,358.54 crore requires regularisation under Article 205 of the Constitution of India. Excess over provisions relating to previous years (2008-09 to 2017-18) amounting to Rs 5,865.65 crore had not been regularised.
Of the total savings of Rs 4,653.96 crore during 2018-19, savings of Rs 100 crore or more amounting to Rs 2,497.13 crore (54%) occurred in nine grants pertaining to Municipal Administration, Sports and Youth Affairs, Public Works, Finance, Electricity, School Education, Health Services, Women and Child Development and Information Technology.
Financial Reporting
As on March 31, 2019, Rs 12,148 Utilisation Certificates (UCS) aggregating Rs 2,340.66 crore for grants disbursed up to 2017-18 remained outstanding. Of 12,148 cases, 25% (3,089 UCs) pertained to the Directorate of Art and Culture while 24% (2,942 UCs) pertained to the Directorate of Panchayats, North Goa
As of March 2019, 377 Detailed Contingent (DC) bills amounting to Rs 141.85 crore drawn by various Departmental authorities on Abstract Contingent (AC) bills were pending settlement. Pendency of UCs and DC bills for long periods was fraught with the risk of fraud and misappropriation.
During 2018-19, expenditure aggregating Rs 4,039 crore constituting 31% of the total expenditure was classified under Minor Head ‘800-Other Expenditure’.
Similarly, revenue receipts aggregating Rs 657 crore constituting 6% of total receipts were classified under Minor Head 800-Other Receipts’. Accounting of large items of expenditure and receipts under omnibus Minor Head “800” affects transparency in financial reporting as disaggregated information on different activities of the State Government is not displayed separately in the accounts.
Achievements of the State Government:
The per capita income of Goa at Rs 25,02,420 during 2018-19 was the highest the country. During 2018-19, the State achieved two of the three major fiscal targets set under the Goa Fiscal Responsibility and Budget Management (First Amendment) Act, 2014 i.e (1) it is a revenue surplus State from 2014-15 onwards, and (2) the ratio of fiscal deficit to Gross State Domestic Product (GSDP) at 2.32% was below the ceiling of 3%.
In respect of Debt-GSDP ratio fixed at 25% by the Goa FRBM (First Amendment) Act, 2014, the current ratio stands marginally higher at 26.45%.
Revenue receipts increased by Rs 2384 crore (3% during the year and the own tax revenue of the State also increased by Rs 140 crore (3%) during the year over the previous year.
The State Government needs to improve its Tax-GSDP ratio (6.31%) which was lower than the normative assessment of Fourteenth Finance Commission (FC XIV) (8.37%).
