The Comptroller and Auditor General of India (CAG), in its report — State Finances Audit Report for the year-ended March 2021 — expressed concern that the State government was not fully disclosing its off-budget borrowings/liabilities and thereby circumventing the FRBM norms.
This, according to the CAG, had the dual impact of diluting public financial management and legislative oversight. Outstanding debt at the end of the year has increased by 19 % over the preceding year and in fact, its growth rate was higher than that of the GSDP or revenue receipts. Moreover, there was no evidence on record to show that the government had made any financial impact study for long maturity borrowings with marginally lesser/similar interest rates.
The State government was not fully disclosing all the guarantees given by it to various institutions. “As the State registered revenue deficit, market borrowings had to be used to finance revenue deficit and fiscal deficit. Utilisation of Ways and Means Advances has increased significantly in the current year,” the CAG said in the report.
