The Comptroller and Auditor General of India (CAG), in its State Finances Audit Report for the Financial Year 2020-21, said that the State government had a liability for off-budget borrowings amounting to ₹86,260 crore, which was not disclosed appropriately in its budget documents.
The result was dilution of public financial management and oversight of the Legislature, and placing major sources of funding of the government’s crucial infrastructure projects beyond the control of the Legislature.
The outstanding public debt at the end of 2020-21 increased by 15.39% (₹46,444 crore) over the previous year.
Revenue receipts
The CAG mentioned that the State witnessed a 5.50% increase in revenue receipts during the year due to a rise in transfers from the Government of India (GoI).
The State received a compensation of ₹5,838 crore towards the revenue loss incurred in the implementation of the Goods and Service Tax (GST), partly in the form of grants amounting to ₹3,527 crore and the balance as a back-to- back loan from the GoI.
The CAG stated that the obligation to repay the loan was not on the resources of the State as the debt servicing would be done from the collection of cess in the GST compensation fund.
It was further stated by the CAG that the State government had not adhered to the targets prescribed in the A.P. Fiscal Responsibility & Budget Management Act in respect of fiscal deficit and outstanding liabilities.
The CAG also observed that a major portion of the borrowings during the year 2020-21 was utilised to balance the revenue account, which affected asset creation in the State.
