Guj: CAG says subsidy bill would bring down revenue surplus

The Comptroller and Auditor General (CAG) has pointed out that if the unpaid power subsidy of more than Rs 3,300 crore is factored in, it would seriously dent the revenue surplus of Gujarat.
It also says that the surplus has been overstated.
In it's report for 2013-14 on the state's finances which was tabled in the Assembly yesterday, CAG notes that Gujarat had a revenue deficit during 2009-2011 which turned into a revenue surplus during 2011-2014, and it had surplus revenue of Rs 4,717 crore in 2013-14.
However, it points out, the state-owned Gujarat Urja Vikas Nigam Ltd (GUVNL) is yet to pay outstanding power subsidy to the tune of Rs 3,313 crore, and the subsidy claims are increasing every year.

Total outstanding claims of power subsidy are Rs 3,313 crore, it says.
"Every year, there was increase in the amount of claims... However, government had sanctioned lesser amount against the claims, resulting in outstanding claims which keep increasing the government liability. This has the potential to bring down the (revenue) surplus when paid," says the report.

Further, it says that calculation of revenue surplus may be faulty as the state has not followed the Indian Government Accounting Standard (IGAS)-2 norms.
Accordingly, expenditure on grant-in-aid and subsidies should be booked under revenue expenditure.
"However, the state government wrongfully booked Rs 1,633.5 crore in respect of Grant-in aid and Subsidies as capital expenditure. This resulted in under-statement of revenue expenditure and over-statement of the revenue surplus," says the report.

"Also in 2012-13, amounts of Rs 881.3 crore and Rs 207.27 crore were disbursed as Grant-in-aid and subsidy respectively under various capital major heads of expenditure. This was reported in CAG report for the year ended on March 2013," it has noted.