Delay in tabling of the audit report of the Comptroller Auditor General (CAG) in the Vidhan Sabha has deprived voters in Bihar to examine the financial performance of the government. Six reports of CAG are pending. Only two reports of 2017-18 have been presented and none have been tabled for 2019-2020.
CAG is empowered to audit all receipts and expenditures from the Government of India and the State governments. In the recent past it has pulled up the Bihar government headed for indiscreet utilization of funds. The CAG has recorded the unnecessary withdrawals from the Contingency Fund and its use of the borrowed funds for repayment of borrowings and interests thereupon.
The CAG report which was tabled in the Vidhan Sabha in March 2020 revealed that the corpus of the State’s Contingency Fund of Rs 350 crore has been regularly increased on a temporary basis. At present State’s Contingency Fund stands at Rs 6403.42 crore. CAG has objected to unnecessary withdrawals from this fund.
The previous CAG report read:“During 2017-18, the state government made 126 withdrawals amounting to Rs 4, 949.21 crores from the Contingency Fund. Out of these, 35 withdrawals amounting to Rs 314.49 crore (6.35 percent) were made for meeting expenditures which were clearly non-contingent in nature, violating Constitutional provisions”.
The CAG had asked the Finance Department to review the practice of such a large annual increase in the Contingency Fund corpus and also ensure the advances from this fund are utilized only to meet urgent expenditures.
The CAG report recorded its concern over the manner in which 80 to 85 percent of the borrowed funds were utilized for repayment of borrowings and interest. This revealed that the state has been spending less on developmental activities.
The primary deficit of the State has increased nearly double-fold in the past four years which indicates “non-debt receipts were insufficient to meet the primary expenditure of the State as well as to meet the Interest Payment."
The revenue receipts in 2017-18 grew by 11 percent as compared to the previous year but were lower than the budget estimates by Rs 19, 711 crores.
The revenue expenditures in 2017-18 grew by eight percent but were lower than the budget estimates of Rs 19, 979 crores while Capital expenditure in 2017-18 increased by six percent but was lower than the budget estimates of Rs 3, 289 crore.
The CAG has recommended that “The Finance Department should rationalize the budget preparation exercise so that the persisting gap between budget estimates and actual is bridged.”
Bihar government incurred a notional loss of over Rs 3, 479 crores on account of the difference between the Government’s borrowings cost and the return on investment in various entities.
The CAG report pointed out that out of 127 projects worth over Rs 1, 819 crores due for completion during 2011-12 to 2017-18, the costs were revised only for three projects. The details of the remaining 124 projects were not furnished.
Out of the total savings of Rs 46, 396.66 crores, only Rs 34, 570.64 crores was surrendered while the remaining Rs 11, 826.02 crore which comes to 25 percent of total savings lapsed during the year. Further, Rs 19, 042.51 crore, which is 55 percent of the total surrender was surrendered on the last working day of March 2018.
The CAG reports said there has been total surrender of funds in 189 heads of accounts.
It revealed that the accounts of 30 working PSUs/Corporations and 37 non-working PSUs/Corporations are in arrears from one to 22 years and one to 41 years respectively in violation of the Companies Act/Acts of respective statutory corporations.
The CAG report disclosed that Rs 6, 162.68 crore drawn on 15, 214 Abstract Contingent (AC) bills remained outstanding as of March 2018 due to delays in submission of Detailed Contingent (DC) bills.
In its last report CAG had asked the Finance Department to ensure all controlling officers adjust AC bills pending beyond the prescribed period in a time-bound manner. Disciplinary actions could be initiated against officers/officials who draw funds on AC bills to avoid lapse of budget.
It may be recalled that in 2010, four audit reports for the fiscal year 2008-09, by the CAG was presented in the Vidhan Sabha on July 23, 2010.
In 2020, the ruling parties are going before the electorate without presenting a single CAG audit report for 2018-19. Bihar Finance Minister presented only two CAG audit reports for 2017-18.
Bihar Finance Minister ought to have tabled the CAG report for 2018-19 by convening session of current state assembly in September. CAG submitted its audit report to Raj Bhawan on 17August 2020. The delay in preparation and finalisation of the audit reports for 2019-2020 by CAG is also matter of grave concern. Parliament's Public Accounts Committee ought to examine this aspect of CAG's conduct as well.
Election Commission announced election schedule on 25 Sept. Finance Minister had one month to demonstrate his accountability. It seems to imply that Finance Minister has failed to comply with CAG's recommendations. State Legislature's Public Accounts Committee of the new state assembly ought to rigorously undertake a thorough probe into the instances of dereliction of duty after November 10.