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| CAG raps Orissa over generous food subsidy |
| BS Reporter / Kolkata/ Bhubaneswar Dec 26, 2011, 00:11 IST |
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The implementation of the much touted Rs two per kg of rice scheme by the Orissa government taken up mainly to woo voters has come under attack from the Comptroller and Auditor General of India (CAG).
In its latest report on state finances for the year ended March 31 this year, the CAG has rapped the state government for doling out food subsidies at Rs 932 crore, a large part of it due to implementation of the rice scheme, as against the normative projection of Rs 84 crore of the 13th Finance Commission.
The CAG observed that the rice scheme introduced by the state government during 2008-09 continued till 2010-11 even though the 13th Finance Commission had recommended phasing out of subsidies.The CAG has advised the state government to consider reduction in subsidy payments to public sector undertakings for boosting their operational efficiency and close down non-working PSUs.
The government may resort to need-based borrowings to reduce interest payments and contain the growth of unproductive non-Plan revenue expenditure, the report said.
The state government's failure to expedite projects taken up on the public private partnership (PPP) mode has also come under scrutiny of the CAG.
“The government has framed PPP policy in 19 sectors of the economy to generate maximum resources for infrastructure build up during 2007-12. However, the resource generated during 2007-11 was negligible as most of these projects did not take off. Only six out of 64 projects had been completed at an estimated expenditure of Rs 36.99 crore. Effective actions have to be taken to gear up the activities of PPP for generation of additional resources for creating public infrastructure which is so woefully deficient in the state”, the CAG said in its report.
Also, there is a need to appropriately disclose the quantum of resources planned to be generated through the PPP route in the budget and finance accounts which has not been done so far, the report added.
In the area of financial reporting, the CAG has found the state government's compliance with various rules, procedures and directives relating to utilization of funds unsatisfactory as evident from delays in furnishing utilization certificates against the grants received from various grantee institutions.
The pendency for utilization certificate is the highest for panchayati raj department at Rs 1819.66 crore. The total pendency stands at Rs 4688.32 crore by the end of 2010-11.
Another key concern raised by the CAG is the state government's inability to amend the state Fiscal Responsibility and Budget Management (FRBM) Act.
The 13th Finance Commission had recommended amendment to the state FRBM Act incorporating therein the continuation of the already achieved zero revenue deficit and setting a target of containing fiscal deficit at three per cent of the GDP by the end of 2011-12.
The CAG has urged the state government to initiate steps for amending the Act, incorporating therein the issues raised by the 13th Finance Commission for a better monitoring of expenditure and enhanced grip over the state finances.On a positive note, the CAG has lauded the state for its efforts towards fiscal correction and consolidation by raising revenue surplus and bringing down fiscal deficit.
The CAG observed that the fiscal deficit decreased from Rs 2266 crore in 2009-10 to Rs 658 crore due to increase in revenue receipts as well as lower growth of revenue expenditure.
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