The report said that there are huge number of pending DC Bills, which was a major issue before the state government and suggested strong measures are needed to be taken to ensure their timely submission and for effective steps to settle all outstanding DC Bills.

The report said that as against savings of Rs 462 crore in eight cases, savings of Rs 6,063 crore were surrendered on the last two working days of March 2010. Audit scrutiny revealed instances where amounts surrendered were in excess of actual savings indicating lack of or inadequate budgetary control.

The report said that rush of expenditure in the last month of the financial year 2009-10 in 18 major heads amounted to 67 per cent of the total expenditure.

According to the CAG report though the state maintained a revenue surplus during these years and had already achieved the 12th Finance Commission recommendation of eliminating revenue deficit, there was a decrease in the revenue surplus during this period.

The report said that the fiscal deficit, which was well within three per cent of the Gross State Domestic Product (GSDP) increased to 3.4 per cent during the year, which too was within the revised recommendation of 3.5 per cent.

It suggested the need to reduce non-plan expenditure as the revenue expenditure was 80 per cent of the total expenditure, of which 74 per cent was under the non-plan head, which included expenditure on salaries, pension payments, interest liabilities and subsidies, which constituted 77 per cent of non-plan revenue expenditure.

A CAG review showed that the average return on government’s investments in government companies, statutory corporations, cooperative banks and societies varied between 0.24 and 0.38 per cent during the last three years.

The government paid average interest on borrowings at rates ranging from 6.48 per cent to 7.93 per cent and this was obviously an unsustainable proposition.

The state government, it suggested, should, therefore, initiate steps to seek better value for money in its investments. Otherwise the high cost of borrowed funds invested in projects with low financial returns, would continue to strain the economy.

The report also said that increasing fiscal liabilities accompanied by negligible rates of return on government investment and inadequate interest cost recovery on loans and advances might result in a situation of unsustainable debt in the medium to long term unless suitable measures are initiated to reduce the Non-Plan revenue expenditure and to mobilize additional resources, through tax and non-tax sources.

During 2009-10, there was an overall savings of Rs 10,546 crore, which was a result of the total savings of Rs 10,644 crore, being offset by excess expenditure of Rs 98 crore.

According to report excess expenditure required regularization under Article 205 of Constitution.

There was 100 per cent surrender of funds amounting to Rs 522 crore in 69 schemes. Therefore, it is essential that the state government strengthens its budgetary controls to avoid such deficiencies in financial management.

The report said there were also instances of inadequate provision of funds and unnecessary/excessive re-appropriations.

The CAG stressed that the state government’s compliance with various rules, procedures and directives was not satisfactory and the government provided grants-in-aid to various bodies and institutions without ensuring proper utilization for the intended purposes.

It called for improve accountability and transparency. Besides, grants should not be provided to institutions which fail to submit utilization certificates within the stipulated time.

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