 "AG reports flag up Punjab's financial mess")
The three reports - on finances, the revenue sector, and public sector undertakings (PSUs) - were presented in the state Assembly on Monday. These revealed ballooning borrowings, leakages in tax collections and non-compliance on rules and directives in PSUs.
"Between FY11 and FY15, the total public debt increased from Rs 74,784 crore to Rs 1,12,366 crore," said Jagbans Singh, principal accountant general, Punjab. "Most of the public debt was used to repay earlier debt. Only eight to 10 per cent of the borrowings were utilised for capital expenditure in the period."
He added: "If this practice continues, Punjab will not be able to generate additional revenue to service its debt and would have no option but to raise new borrowings every year to repay borrowings of earlier years."
In FY15, 23 per cent of the revenue receipts were used to meet interest payments, said Singh during a news meet, warning about a debt quagmire.
The Fiscal Responsibility and Budget Management Act, 2003, has fixed the target of the debt-gross state domestic product (GSDP) ratio as 38.7. Though Punjab's debt-GSDP ratio was well within the target, at 32.12, borrowed funds were mostly used to repay past debts.
Thirty-four projects, which were scheduled to be completed between FY09 and FY15, were incomplete. As much as Rs 654 crore was blocked in these incomplete projects.
The AG report also accused the Punjab government of an excess expenditure of Rs 2,057.34 crore incurred between FY11 and FY14, which requires regularisation. An expenditure of Rs 352 crore, says the report, was incurred without a budgetary provision.
The report highlights there was no system for the assessment of value-added tax, and the state suffered a loss of Rs 281 crore because of deficiencies in the system and no scrutiny after assessment.