The Comptroller and Auditor General of India (CAG) has expressed concern that the State government utilised borrowed funds for repayment of public debt in the financial year 2021-22.
“Normally, public debt is discharged using revenue surplus. However, the government incurred revenue deficit of ₹9,335 crore during 2021-22. The borrowed funds were utilised for the repayment of public debt,” the CAG said in its report tabled in the Legislative Assembly on Sunday.
The CAG said the extent to which the fiscal deficit, as represented by borrowed funds, had been channelised towards creation of capital assets was an indicator of prudent financial management. The borrowings of ₹46,995 crore in the year was partly utilised to meet capital expenditure of ₹28,883 crore and loans and advances of ₹8,469 crore.
The State at the end of 2021-22 had revenue deficit of ₹9,335 crore and fiscal deficit of ₹46,639 crore and the fiscal deficit was met from net of borrowings and other liabilities (public debt of ₹42,936 crore), public account (₹3,773 crore) and cash balance (₹ 70 crore). Around 50 per cent of the revenue receipts (₹1.27 lakh crore) was spent on committed expenditure like salaries (₹30,375 crore), interest payments (₹19,161 crore) and pensions (₹14,025 crore).
In 2021-22, loans totalling to ₹45,716 crore at interest rates varying from 6.89 per cent to 7.37 per cent repayable between 2032 and 2051 were raised from the open market. In addition, the State government also raised ₹1,279 crore from other financial institutions like LIC, GIC and NABARD. A huge ₹67,274 crore was availed as ways and means advances and repaid during the year. “Thus the internal debt raised during the year excluding Ways and Means Advances was ₹46,995 crore. Repayments of Internal Debt of State government excluding Ways and Means Advances was ₹8,333 crore,” the CAG said.
The total loans and advances made by the government was ₹52,379 crore including ₹8,441 crore towards loans and advances to government companies/corporations, non-government institutions and local bodies and ₹28 crore as loans to government servants during the financial year. Interest due on these loans amounted to ₹4,171 crore and only ₹47 crore (0.09 per cent of the total outstanding loan of ₹52,379 crore) was received towards repayment of loans and advances and this pertained to the loans given to government servants.
“Effective steps to recover the outstanding loans would facilitate the government to maintain better fiscal position,” the CAG said.
