CAG red-flags high contingency fund withdrawal by Bihar Govt

Critical of Bihar government, CAG today red-flagged faulty loan recovery system in the state and said it made contingency fund withdrawals to the tune of Rs 690 crore for expenses that were not of unforeseen nature.
The CAG Report on State Finances, tabled today in the Legislative Assembly by Finance Minister Bijendra Prasad Yadav, also observed that fiscal liabilities of the state increased from Rs 58,689.91 crore in 2009-10 to Rs 86,939 crore in 2013-14.
While revenue surplus also increased by Rs 1,341 crore, the fiscal deficit increased from Rs 6,545 crore in 2012-13 to Rs 8,351 crore in 2013-14.

The report also criticised the state government for improper budget provision estimation and said around Rs 31,479 crore, as against the total budget provision of Rs 1,13,153 crore, were saved during 2013-14.
The CAG report pointed towards a faulty loan recovery system in the state, saying that "every year huge amount of loans were given by the Bihar government to different institutions or organisations of the state, but their recovery was negligible leading to a huge balance of repayment in arrears of Rs 21,379.36 crore at the end of March 2014."
The report said the central government directly transferred Rs 9,464.5 crore to the implementing agencies in Bihar during 2013-14, which was around 14 per cent more than the previous year.

Of the funds directly transferred, the major recipients were District Rural Development Agency, which received Rs 4,606 crore or 49 per cent of the total fund, Bihar Education Project Council got Rs 2610 crore or 28 per cent and Pradhan Mantri Gram Sadak Yojana, under which Rs 725 crore or eight per cent or the entire amount was provided.

It said this scenario may adversely impact the implementation of development programmes in the state adding, substantial non-utilisation of funds were witnessed in Food and Consumer Protection Department, as well as, Animal and Fisheries Resources Department in the state.
"Persistent savings for the last five years were also noticed in 10 departments performing social and economic services," the report said.

The report indicated that the controlling officers did not reconcile around Rs 59,020 crore under 71 major heads, with books of the Accountant General, Bihar during 2013-14. The state also withdrew advances amounting Rs 690 crore on 51 occasions from its contingency fund to meet expenditure, which was not of unforeseen nature.
Vouchers for 9,579 items amounting to Rs 489 crore for the period under consideration were not received from 65 treasuries. Out of these, 1,360 vouchers amounting to Rs 183 crore pertained to four treasuries in Patna and Muzaffarpur.