Audit report finds Assam performed well on fiscal front

When it came to controlling fiscal deficit and displaying fiscal prudence, the Northeastern state of Assam performed well; as it could effectively control its fiscal deficit within the limit prescribed under the Assam Fiscal Responsibility and Budget Management (AFRBM) Act, 2011. The audit report of Comptroller and Auditor General (CAG) for the year 2013-14, resealed recently, found that the fiscal deficit of Assam was at 2.33 per cent of total state GDP (Gross Domestic Product), which was well below the 3 per cent mark; as had been set by the AFRBM Act.

"The fiscal position of Assam, viewed in terms of key fiscal parameters - revenue deficit, fiscal deficit and primary deficit , indicated that except during 2009-10 the state had maintained revenue surplus during the last five years. The fiscal deficit of the state at 2.33 per cent was also lower than 3 per cent of GSDP, the limit prescribed under the Assam Fiscal Responsibility and Budget Management (AFRBM) Act 2011," stated the CAG report. However, the report also found that the primary surplus of the 2012-13 turned into primary deficit during the fiscal 2013-14.
 

The revenue receipts of Assam grew by Rs 1,522 crore (five per cent) over the previous year. The increase was contributed by tax revenue of Rs 745 crore (49 per cent), non-tax revenue by Rs 231 crore (15 per cent) and state's share of Union taxes and duties by Rs 974 crore (64 per cent).

The overall revenue expenditure of the state increased by 50.69 per cent from Rs 21,232 crore in 2009-10 to Rs 31,990 crore in 2013-14 at an annual average rate of 10.13 per cent. The Non-Plan Revenue Expenditure (NPRE) constituted a dominant share of nearly 78 per cent in the revenue expenditure and increased by Rs 2,320 crore over the previous year, found the audit report. The Plan Revenue Expenditure (PRE) increased by Rs 533 crore (8.21 per cent) from Rs 6,495 crore in 2012-13 to Rs 7,028 crore in 2013-14.The auditor observed that the expenditure pattern of the Assam "revealed that there was an increasing pressure on revenue expenditure. Salaries and wages alone accounted for 49 per cent of revenue receipts of the state during 2013-14. It increased by 18 per cent from Rs 13,442 crore in 2012-13 to Rs 15,814 crore in 2013-14.

According to the findings of the audit report, there were 109 incomplete projects (total cost more than Rs 1 crore of each project) which were due to be completed by March 2014 in which Rs 384.76 crore was blocked. Of these, 83 projects involving Rs 322.32 crore remained incomplete for less than three years, 18 projects involving an amount of Rs 37.32 crore remained incomplete for periods ranging from three to five years and six projects involving Rs 17.08 crore remained incomplete for more than five years. The revised cost of six incomplete projects increased by 42.54 per cent from Rs 47.88 crore (initial budgeted cost) to Rs 68.25 crore (total revised cost) and resulted in cost overrun of Rs 20.37 crore.

"Effective steps need to be taken for expeditious completion of the incomplete projects to avoid further cost overrun and delay in achieving the objectives. A performance-based system of accountability should be put in place in the government companies and statutory corporations so as to derive profitability and improve efficiency in service. The government should ensure better value for money in investments by identifying the companies or corporations which are endowed with low financial but high socio-economic returns and justify the use of high cost borrowed funds for non-revenue generating investments through clear and transparent guidelines," said the report.