PNS|Vijayawada
The CAG report has highlighted that the fiscal parameters of the State of Andhra Pradesh as reflected in its Revenue, Fiscal and Primary Deficits were negative throughout the five-year period 2017-22.
As per the CAG report which was tabled in the Assembly, there were instances of misclassification of revenue transactions under the capital section and non-accountable of other liabilities, which would have pushed up the Deficits to a further extent, as brought out in this Report as well as in the State Finances Audit Report of the CAG over the last few years.
Though the outstanding liabilities were ostensibly below the targets prescribed in the revised APFRBM Act, these would be way more, if the liabilities of the AP Government with regard to its extra-budgetary borrowings are taken into account. The liabilities of the State have been increasing year-on-year and a majority of the borrowings during the year 2021-22 were utilised to balance the Revenue Account of the State affecting asset creation in the State.
AP witnessed an increase of 28.53 per cent in Revenue Receipts during the year 2021-22 as compared to the previous year mainly due to an increase in transfers from the Government of India by 22.90 per cent. AP Government receipts were overstated to an extent of ` 319.02 crore due to the misclassification of reduction of revenue expenditure as revenue receipts.
The State received compensation of Rs 6,389 crore towards revenue loss due to GST implementation, partly as Grants of Rs 3,117 crore and partly as back-to-back loans, of Rs 3,272 crore from GOI. The debt servicing of this loan would be done from the State Finances Audit Report for the year ending March 31, 2022.
Revenue Expenditure increased by 4.25 per cent during 2021-22 and the State Government 2021-22 lapsed unspent amount of Rs 26,380 crore to the Consolidated Fund of the State which resulted in a reduction of Revenue Deficit and Fiscal Deficit when compared to the previous year. State Government while lapsing the unspent balances has also lapsed the FC recommended health sector grants Rs 488.15 crore) given by GoI. The action of the State Government in lapsing these funds was in violation of GoI guidelines and also resulted in an understatement of Revenue Expenditure and Revenue Deficit while creating an interest burden of Rs 11.33 crore for not transferring the funds to the Consolidated Fund of the State. As against the GoI guidelines to transfer pass-through grants given for implementation of various centrally sponsored schemes to a Single Nodal Account pertaining to those schemes, the State Government had lapsed the unutilised funds of Rs 6,356 crore to the Consolidated Fund of the State as a reduction of expenditure. State Government has not reduced the assets in the books of the Government Account in respect of assets transferred to AP Road Development Corporation and AP Water Resources Development Corporation which resulted in an overstatement of Assets.
The share of capital expenditure (9.21 per cent of total expenditure) was lower in the State compared to the General States average (14.41 per cent of total expenditure) affecting the physical capital formation with a cascading impact on economic growth in the long run.
The funds provided to State Disaster Response Fund (SDRF) were being kept idle from 2019-20 by transferring them to Personal deposit accounts illegally without being spent for drought relief as per sanctions was in violation of SDRF guidelines.
Outstanding Public Debt at the end of the year has increased by 6.97 per cent (` 24,257 crore) over the previous year. State Government has also a liability for off-budget borrowings of Rs 1,18,394 crore and committed liability on account of pending payments of Rs 17,804.20 crore to DISCOMs (towards electricity dues), pending payments towards irrigation projects and water supply schemes to the end of the year 2021-22 which it has not disclosed as part of its budget documents.
There were 1,99,616 adjustment transactions amounting to Rs 11,237.61 crore relating to Personal Deposits carried out during the year 2021-22. These transactions were carried out centrally by the Central Processing Cell (CPC) of CFMS, without routing through/obtaining necessary approvals of the Treasury as required
The per capita income of the State at current prices was Rs 2,07,771 in 2021-22, which was higher than the all-India average of Rs 1,49,848. Andhra Pradesh registered a higher growth rate during the period 2017-18 to 2020-21 and reduced during the current year (2021-22) compared to the national growth rate. The reduction in the growth rate of GSDP of the State during 2020-21 was mainly due to economic turmoil caused by the global pandemic (Covid-19).
