In a worrisome trend, the state finances have been heavily loaded with non-plan expenditure which constituted 80 per cent of the total expenditure of Rs 84,574 crore during 2009-10, according to the report of Comptroller and Auditor General (CAG) of India.
CAG stated that the committed expenditure on salaries and wages, pensions, interest payments and subsidies constituted 81 per cent of the non-plan revenue expenditure, exceeding significantly the projections of the Twelfth Finance Commission.
Though the expenditure pattern indicated a declining trend in revenue expenditure as a percentage of total expenditure up to 2007-08, it had increased to 82 per cent in 2008-09 and declined marginally to 80 per cent during the year under review, it said.
The report, which was tabled in the state Assembly on the last day of the budget session on Tuesday, made several recommendations on various aspects of public expenditure while asking the government to show restraint in terms of the non-plan expenditure.
CAG, however, said that the state government gave adequate fiscal priority to capital expenditure, higher than the average of general category states, during 2005-06 and 2009-10.
During 2009-10, the salary expenditure alone comprised 37 per cent of revenue expenditure net of interest and pension payments as against 35 per cent as recommended by Twelfth Finance Commission, according to the report.
The actual salary bills for the year 2009-10 stood at Rs 17,721 crore as against the indicated expenditure of Rs 10,483 crore under fiscal correction path of the Fiscal Responsibility and Budget Management (FRBM) Act. The government had spent 21.89 per cent higher than the previous year on salary bills while exceeding the budget estimates by 8.77 per cent, the report said.
Project delays in irrigation
As the government had increased allocations to irrigation sector during this period, the expenditure incurred on incomplete projects constituted 39 per cent of the progressive capital expenditure at the end of March 2010. However, the delays in completion of 206 projects led to a huge cost overrun of Rs 27,235 crore and blocking of Rs 36,165 crore spent on these projects, the report said.
Citing the above facts, CAG asked the government to put in place an action plan to complete these projects in a time frame so that people get envisaged benefits in time.
In yet another notable trend, there has been growing gap between estimates and actual realisation in terms of VAT collections, the largest component of the state's own revenues. According to the report, short fall in VAT receipts showed expanding trend to -7.49 %, -12.20 % and -14.61 % for the years 2007-08, 2008-09 and 2009-10, respectively, as compared to the budget estimates.
When it comes to share of Central taxes, the receipts from Customs and Central excise departments had come down in 2009-10 as compared to previous year while the direct taxes had reported a growth.
Rs 25 crore losses from govt actions
The CAG had pointed out that various actions of government departments resulted in losses of up to Rs 25 crore. In one such instance, the Andhra Pradesh Mineral Development Corporation Limited had issued tenders without estimates resulting in an extra expenditure of Rs 97.21 crore besides making Rs 24.72 crore irregular payment for the excess overburden removed in a barytes contract.
In another instance the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) had collected lesser service charges towards land acquisition made in favour of SRI City resulting in a loss of Rs 25.55 crore, the report said.
