State Finances Government of Tamil Nadu
Total Page:16
File Type:pdf, Size:1020Kb
Report of the Comptroller and Auditor General of India on State Finances for the year ended March 2017 Government of Tamil Nadu Report No. 6 of 2017 Report of the Comptroller and Auditor General of India on State Finances for the year ended March 2017 Government of Tamil Nadu Report No. 6 of 2017 TABLE OF CONTENTS Paragraph Page Preface v Executive Summary vii CHAPTER I - FINANCES OF THE STATE GOVERNMENT Profile of Tamil Nadu 1 Gross State Domestic Product 1 Introduction 1.1 2 Resources of the State 1.2 7 Revenue receipts 1.3 10 Capital receipts 1.4 17 Public account receipts 1.5 17 Application of resources 1.6 18 Quality of expenditure 1.7 25 Financial analysis of Government expenditure and 1.8 29 investments Assets and Liabilities 1.9 33 Debt management 1.10 37 Fiscal Imbalances 1.11 38 Follow-up action by State Government 1.12 42 Conclusion 1.13 42 CHAPTER II - FINANCIAL MANAGEMENT AND BUDGETARY CONTROL Introduction 2.1 45 Summary of Appropriation Accounts 2.2 45 Financial accountability and budget management 2.3 47 Review of selected grants 2.4 52 Advances from the Contingency Fund 2.5 57 Conclusion 2.6 58 Recommendation 2.7 59 i Report on State Finances, Tamil Nadu for the year ended March 2017 Paragraph Page CHAPTER III - FINANCIAL REPORTING Delay in furnishing of utilisation certificates 3.1 61 Non-reconciliation of receipts and expenditure 3.2 61 Non-submission/delay in submission of accounts 3.3 62 Non-adjustment of temporary advances 3.4 63 Operation of Personal Deposit Accounts 3.5 63 Misappropriations, losses, defalcations, etc. 3.6 64 Deficiencies noticed in the Pay and Accounts Offices 3.7 65 Amounts booked under Minor Head “800” 3.8 66 Conclusion 3.9 67 Recommendations 3.10 67 APPENDICES Appendix Subject Reference to Page No. Paragraph 1.1 State Profile 1.3, 1.3.1.1 69 and 1.3.1.2 1.2 Structure and Form of Government Accounts 1.1 70 Part A Part B Layout of Finance Accounts 1.1 70 1.3 Methodology adopted for assessment of fiscal 1.1 72 Part A position Part B The Tamil Nadu Fiscal Responsibility Act, 2003 1.1 72 1.4 Time series data on the State Government finances 1.1, 1.3, 73 1.9.2 and 1.10 1.5 Abstract of Receipts and Disbursements for the 1.1.1, 1.9.1 75 Part A year 2016-17 and 1.9.6 Part B Summarised financial position of the Government 1.1.1, 1.9.1 77 of Tamil Nadu as on 31 March 2017 and 1.9.6 1.6 Details of incomplete projects 1.8.2 78 1.7 Maturity spread of market borrowings 1.9.5 80 2.1 Statement showing cases where savings exceeded 2.3.1 81 ` 10 crore in each case and also by 20 per cent or more of the total provision ii Table of contents Appendix Subject Reference to Page No. Paragraph 2.2 List of Grants having savings of ` 50 crore and 2.3.1 83 above 2.3 Excess over provisions relating to previous years 2.3.2 85 requiring regularisation 2.4 List of Grants having Persistent Savings during 2.3.4 86 2012-17 2.5 Expenditure incurred without provision (Original/ 2.3.5 88 Supplementary) 2.6 Cases where supplementary provision (` 50 lakh or 2.3.6 90 more in each case) proved unnecessary 2.7 Excessive/insufficient re-appropriation of funds 2.3.7 (ii) 92 2.8 Injudicious re-appropriations 2.3.7 (iii) 97 2.9 Cases of withdrawal of entire provision 2.3.9 99 2.10 Grants in which surrenders were made in excess of 2.3.10 103 actual savings 2.11 Cases where savings of ` one crore and above not 2.3.11 105 surrendered 2.12 Cases of surrender of funds in excess of ` 10 crore 2.3.11 107 on 31 March 2017 2.13 Rush of Expenditure 2.3.12 110 2.14 Details of Contingency Fund orders issued, 2.5 117 utilisation as reported by AG (A&E) and the amount of expenditure incurred as at the end of the year 3.1 Utilisation Certificates outstanding as on 3.1 119 30 September 2017 3.2 Lists of CCOs who have not reconciled accounts 3.2 120 3.3 Statement showing names of bodies and authorities, 3.3 123 the accounts of which had not been received 3.4 Department/category-wise details of loss to 3.6 132 Government due to theft, misappropriation, shortage, etc. 3.5 Operation of Minor Head ‘800 - Other 3.8 133 Expenditure’ (50 per cent and above) 3.6 Operation of Minor Head ‘800 - Other Receipts’ 3.8 134 (50 per cent and above) Glossary of terms and abbreviations used in the - 135 Report iii PREFACE 1. This Report has been prepared for submission to the Governor of Tamil Nadu under Article 151 of the Constitution. 2. Chapters I and II of this Report contain audit observations on matters arising from examination of the Finance Accounts and Appropriation Accounts respectively, of the State Government for the year ended 31 March 2017. Information has been obtained from the Government of Tamil Nadu, wherever necessary. 3. Chapter III on ‘Financial Reporting’ provides an overview and status of the State Government’s compliance with various financial rules, procedures and directives during the current year. 4. The Reports containing the findings of Performance Audit and audit of transactions in various departments and observations arising out of audit of Statutory Corporations, Boards and Government Companies and the Report containing observations on Revenue Receipts are presented separately. v V EXECUTIVE SUMMARY Executive Summary The Report Based on the audited accounts of the Government of Tamil Nadu for the year ending March 2017, this Report provides an analytical review of the Annual Accounts of the State Government. The financial performance of the State has been assessed with reference to the Tamil Nadu Fiscal Responsibility Act, 2003 and its amendments from time to time, Budget documents, Fourteenth Finance Commission Report and other financial data obtained from various Government departments and organisations. The Report is structured in three Chapters. Chapter I is based on the audit of Finance Accounts and makes an assessment of Government of Tamil Nadu’s fiscal position as on 31 March 2017. It provides an insight into trends in committed expenditure and borrowing pattern. Chapter II is based on the audit of Appropriation Accounts and it gives a description of appropriations and the manner in which the allocated resources were managed by the service delivery departments. Chapter III is an inventory of Government of Tamil Nadu’s compliance with various reporting requirements and financial rules. The Report also includes appendices of additional data collated from several sources in support of the findings. A glossary of selected terms has been given at the end of the Report. Audit findings Fiscal position: The revenue surplus, which prevailed during 2012-13 turned negative in the succeeding years and stood at ` 12,964 crore in 2016-17. During 2016-17, the State failed to achieve revenue surplus as projected in the Medium Term Fiscal Plan (MTFP). Though, the State could contain its revenue deficit within the target proposed in the Budget, it could not contain the fiscal deficit to Gross State Domestic Product (GSDP) as envisaged under the Tamil Nadu Fiscal Responsibility (TNFR) Act, Fourteenth Finance Commission (FFC), Budget and MTFP. The fiscal deficit increased from ` 32,627 crore in 2015-16 to ` 56,170 crore, an increase of 72.16 per cent. Accuracy of Revenue Deficit/Fiscal Deficit: There were short transfers of ` 3,011 crore to Sinking Fund, Guarantee Redemption Fund, various reserve funds and defined contributory pension scheme, which resulted in understatement of Revenue and Fiscal Deficits to that extent. Revenue receipts: Revenue receipts of the State, grew by ` 11,223 crore in 2016-17 over the previous year and stood at ` 1,40,231 crore. The annual growth rate of revenue receipts during 2016-17 stood at 8.70 per cent, which was much less than growth rate (11.52 per cent) of the General Category vii Report on State Finances, Tamil Nadu for the year ended March 2017 States. The fluctuating growth rate of revenue receipts, increased to 8.70 per cent during 2016-17 against 5.38 per cent in the previous year. The revenue receipts as a percentage of GSDP which ranged between 11.10 and 11.55 during 2012-16 dropped to 10.80 during 2016-17. The revenue buoyancy with reference to State’s own taxes decreased from 2.33 in 2015-16 to 1.28 in 2016-17 due to drop in growth rate of State’s own taxes and grants-in-aid. Revenue expenditure: Of the total expenditure of ` 1,99,950 crore during 2016-17, revenue expenditure (` 1,53,195 crore) accounted for 76.62 per cent. Out of the revenue expenditure, 76.95 per cent (` 1,17,889 crore) was incurred on the non-plan component. The committed expenditure (` 94,750 crore) stood at 67.57 per cent of the total revenue receipts (` 1,40,231 crore) of the State during 2016-17, as against 64.58 per cent during 2015-16. Capital expenditure: Capital expenditure increased by ` 1,714 crore (9.02 per cent) over the previous year as against 6.70 per cent in 2015-16. The increase in capital expenditure during the year was mainly under Energy, Water Supply, Sanitation, Housing & Urban Development, Irrigation & Flood control, Transport and Health & Family Welfare.