State’s revenue surplus down by Rs 376.57 crore in 2010-11 compared to previous year

CAG REPORT TABLED


AUDITORS RECOMMEND HIGHER PRIORITY FOR DEVELOPMENTAL EXPENDITURE
SAGAR CHHETRI
GANGTOK, 28 June: The Reports on Accounts and major audit findings of the Comptroller and Auditor General [CAG] for the year ended 31 March 2011 on the Government of Sikkim was placed by Chief Minister Pawan Chamling before the State Assembly today. A brief report on the major findings contained in the CAG Report was also shared by the Principal Accountant General [Audit], Sikkim, LAC Singh, during a press conference today.
The CAG Report on the State Finances contains audit findings on matters arising from examination of Finance Accounts and Appropriation Accounts of the State Government for the year ended 31 March 2011 and an overview and status of the State Government’s compliance with various financial rules, procedures and directives during the current year. The Audit Report includes five chapters comprising four performance reviews and 18 paragraphs, based on the audit of selected programmes and activities of the Government including a separate chapter on Integrated Audit of Urban Development and Housing Department.
It is informed that according to the existing arrangements, copies of the draft audit paragraphs and draft performance reviews were sent to the Secretaries of the departments concerned by the Accountant General (Audit) with a request to furnish replies within six weeks. The press briefing was informed that replies were not received from the concerned departments with respect to 4 paragraphs.
Audit findings and recommendations in the report state that the fiscal position of the State viewed in terms of key fiscal parameters – revenue surplus, fiscal deficit, primary deficit etc. indicate that the State has been able to maintain revenue surplus over the past five years but the revenue surplus decreased by Rs 376.57 crore - from Rs 516.35 crore in 2009-10 to Rs 139.78 crore in 2010-11.
Likewise, Revenue Receipts in the report mention that the revenue receipts had shown a progressive increase upto the period 2009-10, however, during 2010-11, the revenue receipts decreased by 8.26 per cent over the previous year.
“While 24.25 per cent of the revenue receipts during 2010-11 had come from the State’s own resources comprising tax and non-tax receipts, the share of Central transfers comprising State’s share in Central taxes and duties increased by Rs 150.31 crore whereas grants-in-aid from GOI declined by Rs 194.60 crore during 2010-11,” it is informed.
It is further informed that the tax revenue exceeded the projection of XIIIth FC whereas non-tax revenue was less by Rs 66.58 crore [21.57 per cent] in comparison to XIIIFC projections.
On Revenue and Capital expenditure, the report highlights that the overall revenue expenditure of the State increased by 10 per cent from Rs 1,829.02 crore in 2009-10 to Rs 2,011.92 crore in 2010-11, while revenue expenditure constituting 81.50 per cent of the total expenditure grew by Rs 182.90 crore over the previous year, the expenditure incurred under capital head which constituted 18.27 per cent of the total expenditure decreased by Rs 197.46 crore over the previous year.
“Out of the total capital expenditure of Rs 451.07 crore, there were 138 incomplete projects as on 31 March 2011 in which Rs 294.16 crore were blocked, out of which 58 incomplete works [Rs270.89 crore] were due to be completed by 31 March 2011,” it is added.
The Report also mentions that the developmental expenditure of Rs 944.80 crore in 2006-07 increased to Rs 1,708.44 crore in 2010-11, however, its share in aggregate expenditure decreased from 72.62 per cent to 69.20 per cent during the period.
It was informed that the ratio of development expenditure as a proportion to aggregate expenditure had also come down by 3.45 per cent in 2010-11 as compared to the year 2007-08 which indicates that the State had given lower priority to this category of expenditure during the year 2010-11 as compared to 2007-08 and the share of committed expenditure in the Non-Plan Revenue Expenditure was 92.56 per cent leaving meager funds for developmental purposes.
The report recommends that the State needs to accord higher priority to its developmental expenditure considering the reduction in this category of expenditure during the year 2010-11 as compared to 2007-08 and reduce its committed expenditure in the overall non-plan revenue expenditure.
It further recommends that the State also needs to ensure timely and effective implementation of incomplete projects to avoid time and cost overrun.
The report points out that the investment of Government money in Government Companies and Statutory Corporations was increasing year after year. However, while the return on the investment was 2.62 per cent, the Government paid an average interest rate of 9 per cent on its borrowings during the year.
It is recommended that the Government ensure better value for money in investment by identifying the Companies/ Corporations which are endowed with low financial but high socio-economic returns and justify if high cost borrowings are worth being channelized there and initiatives may be taken to revive or close down or sell out the huge loss making Corporations/ Companies.
On Financial management and budgetary control, the report mentions that there was an overall savings of Rs 859.66 crore and excess expenditure of Rs 1.59 crore against 46 Grants/Appropriations during 2010-11.
“This excess expenditure of 2010-11 compounded with an excess expenditure of Rs 7.46 crore pertaining to 2007-10 requires regularization by the Legislature under Article 205 of the Constitution of India. Out of a provision of Rs 809.60 crore in 115 sub-heads, Rs 654.84 crore [81 per cent] constituting 15 per cent of the total budget provision of the State were surrendered, which included cent per cent surrender in 62 sub-heads,” it is recommended.
On Financial Reporting, the report highlights that there were deficiencies in furnishing utilization certificates in time against grants/ loans received, non-furnishing of detailed information about financial assistance received by various Institutions and non-submission of accounts in time. It further mentions that there was delay in placement of Separate Audit Reports to Legislature and arrears in finalization of accounts by the Autonomous Bodies/Authorities and cases of misappropriation and losses also indicated inadequacy of controls in the departments.
The Report recommends that an effective mechanism be put in place to ensure timely placement of reports, finalization of accounts and speedy settlement of cases relating to misappropriation and losses.