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Lack of monitoring causes misutilisation, diversion of funds in HP: CAG

The anomaly was highlighted by CAG in its report for the financial year 2019-20 that was tabled in the house by Chief Minister Jai Ram Thakur on the last day of winter session of HP Vidhan Sabha at Tapovan in Dharamshala in Kangra district.

SNS | Dharamshala |

The Comptroller and Auditor General on Wednesday flagged the Himachal Pradesh government for lack of monitoring which was causing misutilisation and diversion of funds.

The anomaly was highlighted by CAG in its report for the financial year 2019-20 that was tabled in the house by Chief Minister Jai Ram Thakur on the last day of the winter session of HP Vidhan Sabha at Tapovan in Dharamshala in Kangra district.

“The non-submission of Utilisation Certificates (UCs) indicated lack of monitoring on utilisation of grants released by the departments to the grantees. This entailed risk of non-utilisation, misutilisation or diversion of funds released for various works, schemes and programmes.

A total number of 2,482 UCs of various departments amounting to 2.847.94 crore was pending as of March 2020. Out of a total of 2,482 outstanding UCs, 1,083 for grants of Rs 1,062.58 crore pertaining to the period 2009-10 to 2017-18.

Further, 58 per cent of the total outstanding amount pertains to two departments, 41.15 per cent (Rs 1,171 crore) in the Panchayat Raj department and 16.72 per cent (Rs 476 crore) Urban Development department,” the report states.

The report states that the state passed the FRBM Act, 2005 to ensure prudence in fiscal management and fiscal stability by progressive elimination of Revenue deficit. However, the FRBM has not been amended as per the recommendations of the 14th Finance Commission.

During 2016-20, the state had continuously reported revenue surplus due to an increase in central devolutions on the recommendations of the 14th Finance Commission. However, the revenue surplus consistently declined from 2016-17 to 2019-20 (except 2018-19) to Rs 12 crore during 2019-20.

The fiscal deficit (Rs 5,597 crore) was 3.38 per cent of GSDP against the target as per the 14th Finance Commission and FRBM Act of three per cent or less during 2019-20.

The primary surplus of 510 crores in 2018-19 turned into a primary deficit of 1,363 crore in 2019-20.

In 2019-20, Himachal had recorded negative growth (-0.67 per cent) in revenue receipts over the previous year which was a significant reduction from 2015-16 (31.37 per cent).

Only 33 per cent of the revenue receipts came from the state’s own resources comprising taxes and non-taxes, while the remaining 67 per cent was contributed by central transfers comprising the state’s share in central taxes and duties (15 per cent) and grants-in-aid from the Centre (52 per cent).

The overall fiscal liabilities at the end of the year were Rs 62,212 crore with a growth of 14.57 per cent over the previous year. The total fiscal liabilities-GSDP ratio in 2019-20 increased by 2.31 per cent over the previous year and stood at 37.60 per cent, which was above the target of the 14th Finance Commission.

The report further mentions that during 2019-20, expenditure of Rs 45,528 crore (84.77 per cent) was incurred against total grants and appropriations of 53,708 crore.

Supplementary provision of 438.61 crore in 18 sub-heads (one crore or more in each case) under 16 grants (Revenue/capital-voted and charged-voted) proved unnecessary/unutilised as the expenditure did not come up even to the level of the original provision.

Besides, in 24 cases, there was a surrender of Rs 6,706 crore which was 15 per cent of the original budget.