Odisha logged 100% spending in 14 heads in March 2012: CA

This is in violation of Cash Management System formulated by the state finance department

The Odisha government has drawn flak from the Comptroller & Auditor General of India (CAG) for incurring 100% expenditure under 14 heads in the last month of 2011-12.

This is in violation of Cash Management System (CMS) formulated by the state finance department to check rush of expenditure towards the fag end of a fiscal.

Latest CAG data on state finances for the year ended March 31, 2012 reveals that under 14 heads, five departments where CMS was already in vogue, spent Rs 330.51 crore in March 2012 alone even though the expenditure was to be spread across the year.

This rush of expenditure was experienced in areas like capital expenditure programme for development and upgradation of distribution system, Odisha State Employment Mission, Targeted Rural Initiative for Poverty Termination and Infrastructure (TRIPTI), establishment of model schools in backward blocks of the state and Odisha State Employment Mission.

The CAG pointed out that maintaining uniform pace of expenditure is a critical component of sound public financial management, as it obviates fiscal imbalance and temporary cash crunches due to revenue expenditure mismatches during a particular month arising out of unanticipated heavy expenditure in that particular month.

Besides, quality of the assets being created out of such expenditure can be maintained if expenditure is incurred in a planned manner, the CAG report stated.

It may be noted that 11 out of 40 administrative departments in Odisha have failed to meet the Plan and Non-Plan expenditure target of 30% in the April-September period of this fiscal.

CMS introduced by the finance department in 2010-11 mandates at least 30% spending by all departments by the end of September. The system aims at curbing rush of expenditure towards the fag end of any fiscal.

The departments that have fallen short of the mandated expenditure level in April-September period include home (23.89%), Odisha Legislative Assembly (24.25%), food supplies & consumer welfare (17.49%), housing & urban development (28.92%), excise (29.58%), rural development (29.28%), energy (20.44%), textiles & handicrafts (29.06%), information technology (0.46%) and employment and technical education & training (24.71%).