India News | AP's Mounting Revenue Expenditure, Deficit Worrisome: CAG

Amaravati, Sep 21 (PTI) The gross mismanagement of finances, particularly the revenue expenditure, by the Y S Jagan Mohan Reddy government has come in for severe rebuke from the Comptroller and Auditor General of India.

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In its State Finances Audit Report for the year ended March 31, 2021, the CAG noted that the liabilities of the state have been increasing year-on-year and majority of the borrowings during the financial year 2020-21 were utilised to balance the revenue account, affecting asset creation.

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The CAG report was tabled in the Legislature on the last day of the monsoon session here on Wednesday.

The CAG also noted that the COVID-19 pandemic had a telling impact on the state economy, leading to a drastic fall in GSDP growth rate.

"Andhra Pradesh registered a GSDP of Rs 9,86,611 crore during 2020-21. While the state was witnessing a growth of more than 10 per cent year by year, the pandemic caused it to register a single digit growth rate of only 1.58 per cent in 2020-21," it pointed out.

The auditor was, however, highly critical of the fact that AP's revenue deficit as a percentage of Total Revenue Receipts (TRR) increased from 23.81 per cent in 2019-20 to 30.34 per cent in 2020-21. Revenue deficit in 2020-21 (Rs 35,541 crore) was higher than the Budget Estimates (Rs 18,434 crore) projected by the state government, it said.

The CAG rapped the state government for failing to assess its revenues realistically and also not containing the revenue expenditure, resulting in continued increase in revenue deficit, despite receipt of substantial post-devolution revenue deficit grant from the Centre.

The state's revenue expenditure (mostly on freebies) increased by 11.06 per cent during 2020-21. This resulted in increase of revenue deficit by 34.42 per cent as compared to the previous year, the CAG added.

The auditor also noted that outstanding liabilities were above the targets prescribed in the revised AP Fiscal Responsibility and Budget Management Act. The liabilities "would be way more", if the state's "extra-budgetary borrowings" were taken into account.

AP's 'Outstanding Public Debt' at the end of March 2021 increased by 15.39 per cent (Rs 46,444 crore) over the previous year. The state government also has a liability for off-budget borrowings of Rs 86,260 crore, which was not disclosed appropriately as part of its budget documents, the audit report noted.

"This has the impact of diluting public financial management and oversight role of the Legislature and placing major sources of funding of government's crucial infrastructure projects beyond the control of the Legislature," the report warned.

The CAG said the "state government should endeavour to assess its revenues realistically and contain the revenue expenditure to minimise the revenue deficit."

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)