SRINAGAR: The Comptroller and Auditor General of India has pointed out various loopholes in the way money for development purposes is utilised in J&K. The report also criticises the budgets presented by economist-turned-politician Haseeb Drabu.
According to the CAG’s report, 95 percent of public debt was utilised for repayment of the principal and interest on public debt of previous years. It was also used to meet regular shortfalls of revenue against expenditure in the fiscal year, when it should have been used for creation of assets and capital expenditure.
“The state government spends 40 percent of the borrowing and other liabilities on capital expenditure, out of which 25% was used for creation of capital assets and the rest was used for day-to-day running of the government,” the report says.
The CAG has pointed out a wrong calculation of revenue deficit. The government calculated a deficit of Rs 639.80 crore while the actual deficit was Rs 4253.42 crore. This was because of understatement of revenue expenditure of Rs 3,613.42 crore, which includes Rs 3,011.91 crore booked under capital expenditure, the CAG says.
The report says that targets set for limiting fiscal deficit were never met. The fiscal deficit should have been at 3 percent of state GDP but it was actually 8.77 percent.
Similarly outstanding liabilities were 60.26 percent of state GDP against the target of 51.42 percent.
The CAG has also found a breach of financial regularity in a sudden rush of expenditure during the last month of the fiscal year. Expenditure incurred under certain heads of accounts during March 2016 ranged between 50 and 100 percent of the total budget, indicating a tendency to utilise the budget at the close of the financial year.
This financial indiscipline was found in capital outlay on police, social security and welfare, labour and employment, and other areas.
Drabu took over as finance minister in March 2015 when his Party PDP stitched an alliance with the right-wing BJP. He has presented three budgets so far.