The Comptroller and Auditor General of India has expressed concern over the off-budget borrowings (OBBs) of the State Government claiming that the percentage of the outstanding liabilities would be way above the limit if these were considered.
In its State Finances Audit Report for the year ended March 31, 2021, the CAG said although the percentage of total outstanding liabilities to GSDP at 28.11 per cent was within the limit of 29.5 per cent prescribed by the XV Finance Commission for 202-21, this would be way above the limit at 38.1 per cent if the OBBs of ₹97,940.45 crore were considered. Non-disclosure of OBB had a dual impact of diluting public financial management and legislative oversight and was in contravention of the recommendations of the XV Finance Commission.
The CAG said the government resorted to longer maturity borrowings as 58.98 per cent of its market borrowings during the year were with a maturity of 20 to 30 years. There was however no evidence on record to show that the government made any financial impact study for long maturity borrowings with similar interest rates. The State Government, the CAG said, was not fully disclosing all the guarantees given by it to various institutions.
