Report Was Laid Before the Gujarat Legislative Assembly on 26 July 2019 State Finances Audit Report of the Comptroller and Auditor General of India
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Report was laid before the Gujarat Legislative Assembly on 26 July 2019 State Finances Audit Report of the Comptroller and Auditor General of India for the year ended 31 March 2018 GOVERNMENT OF GUJARAT Report No. 2 of the year 2019 http://www.cag.gov.in Contents Page Preface v Executive Summary vii Chapter I FINANCES OF THE STATE GOVERNMENT Socio-economic indicators 1 1.1 Introduction 2 1.2 Resources of the State 8 1.3 Revenue Receipts 9 1.4 Capital Receipts 19 1.5 Public Account Receipts 20 1.6 Application of Resources 20 1.7 Quality of Expenditure 27 1.8 Financial Analysis of Government Expenditure and 30 Investments 1.9 Assets and Liabilities 37 1.10 Debt Management 41 1.11 Fiscal Imbalances 43 1.12 Follow up 45 1.13 Conclusion and Recommendations 45 Chapter II FINANCIAL MANAGEMENT AND BUDGETARY CONTROL 2.1 Introduction 47 2.2 Summary of Appropriation Accounts 48 2.3 Financial Accountability and Budget Management 48 2.4 Review of Budget Control Mechanism 55 2.5 Advances from Contingency Fund 62 2.6 Misclassification of ‘grants-in-aid’ as capital expenditure 62 2.7 Conclusion and Recommendations 63 Chapter III FINANCIAL REPORTING 3.1 Delay in furnishing Utilisation Certificates 65 i State Finances Audit Report for the year ended 31 March 2018 Contents Page 3.2 Failure to submit account for amounts drawn on abstract 68 contingent bills 3.3 Bodies/Authorities substantially financed by the Government 69 3.4 Delay in submission of Accounts/placement of Separate Audit 70 Reports of Autonomous Bodies 3.5 Personal Deposit / Personal Ledger Accounts 71 3.6 Misappropriation, losses and defalcation 73 3.7 Operation of omnibus Minor Head 800 74 3.8 Comments on Accounts 76 3.9 Conclusion and Recommendations 78 APPENDICES Appendix 1.1 Part A General Data 81 Appendix 1.1 Part B Structure and Form of Government Accounts 82 Appendix 1.1 Part C Layout of Finance Accounts 82 Appendix 1.2 Part A Methodology adopted for the assessment of 83 Fiscal Position Appendix 1.2 Part B Fiscal Responsibility Act 84 Appendix 1.3 Part-I Abstract of Receipts and Disbursements for the 85 year 2017-18 Appendix 1.3 Part -II Summarised financial position of the 88 Government of Gujarat as on 31 March 2018 Appendix 1.4 Actuals vis-à-vis Budget Estimates and 89 Revised Estimates 2017-18 Appendix 1.5 Time series data on the State Government 95 finances Appendix 1.6 Comparison of main components of Tax 98 Revenue during 2013-14 to 2017-18 Appendix 1.7 Incorrect booking of revenue receipts and 99 revenue expenditure Appendix 2.1 Excess expenditure over appropriations in 100 previous years requiring regularisation Appendix 2.2 Cases where persistent excess of more than ₹ 10 101 crore was noticed consistently during 2015-18 Appendix 2.3 Statement of various grants/appropriations 103 where savings were more than ₹ 100 crore each or more than 50 per cent of the total provision Appendix 2.4 Cases where persistent savings were noticed 107 during 2015-18 State Finances Audit Report ii for the year ended 31 March 2018 Contents Contents Page Page 3.2 Failure to submit account for amounts drawn on abstract 68 Appendix 2.5 Cases where supplementary provision (₹ five 114 contingent bills crore or more in each case) proved unnecessary 3.3 Bodies/Authorities substantially financed by the Government 69 Appendix 2.6 Excess/saving (more than ₹ five crore) resulting 115 3.4 Delay in submission of Accounts/placement of Separate Audit 70 from unnecessary/insufficient re-appropriation Reports of Autonomous Bodies of funds Substantial surrenders of more than 50 per cent 3.5 Personal Deposit / Personal Ledger Accounts 71 Appendix 2.7 117 of total provision or ₹ one crore or more. 3.6 Misappropriation, losses and defalcation 73 Appendix 2.8 Amount surrendered (₹ two crore or more) in 119 3.7 Operation of omnibus Minor Head 800 74 excess of actual savings 3.8 Comments on Accounts 76 Appendix 2.9 Grants in which savings were more than ₹ five 121 3.9 Conclusion and Recommendations 78 crore of which, more than 10 per cent was not surrendered APPENDICES Appendix 1.1 Part A General Data 81 Appendix 3.1 Pending Utilisation certificates in respect of 122 Appendix 1.1 Part B Structure and Form of Government Accounts 82 grants paid up to 2016-17 Appendix 1.1 Part C Layout of Finance Accounts 82 Appendix 3.2 Statement showing names of bodies and 123 Appendix 1.2 Part A Methodology adopted for the assessment of 83 authorities, the accounts of which had not been Fiscal Position received for audit Appendix 1.2 Part B Fiscal Responsibility Act 84 Appendix 3.3 Statement showing pendency of accounts and 127 Appendix 1.3 Part-I Abstract of Receipts and Disbursements for the 85 delay in placement of separate audit reports in year 2017-18 the State Legislature Appendix 1.3 Part -II Summarised financial position of the 88 Appendix 3.4 Department-wise/age-wise break-up of pending 134 Government of Gujarat as on 31 March 2018 cases of misappropriation, defalcation etc. Appendix 1.4 Actuals vis-à-vis Budget Estimates and 89 Appendix 3.5 Department-wise/category-wise details of cases 135 Revised Estimates 2017-18 of loss to Government due to theft, misappropriation/loss of Government material Appendix 1.5 Time series data on the State Government 95 finances Appendix 1.6 Comparison of main components of Tax 98 Appendix 4.1 Glossary 136 Revenue during 2013-14 to 2017-18 Appendix 1.7 Incorrect booking of revenue receipts and 99 revenue expenditure Appendix 2.1 Excess expenditure over appropriations in 100 previous years requiring regularisation Appendix 2.2 Cases where persistent excess of more than ₹ 10 101 crore was noticed consistently during 2015-18 Appendix 2.3 Statement of various grants/appropriations 103 where savings were more than ₹ 100 crore each or more than 50 per cent of the total provision Appendix 2.4 Cases where persistent savings were noticed 107 during 2015-18 State Finances Audit Report ii iii State Finances Audit Report for the year ended 31 March 2018 for the year ended 31 March 2018 Contents State Finances Audit Report iv for the year ended 31 March 2018 Contents Preface 1. This Report has been prepared for submission to the Governor of Gujarat 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 the Appropriation Accounts respectively of the State Government for the year ended 31 March 2018. Information has also been obtained from the Government of Gujarat wherever necessary. 3. Chapter III on ‘Financial Reporting’ provides an overview and status of the State Government’s compliance with various rules, procedures and directives relating to financial reporting 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. State Finances Audit Report iv v State Finances Audit Report for the year ended 31 March 2018 for the year ended 31 March 2018 State Finances Audit Report vi for the year ended 31 March 2018 Executive Summary Executive Summary Background In response to the 12th Finance Commission’s (FC) recommendations, the Government of Gujarat enacted the Gujarat Fiscal Responsibility Act, 2005 which incorporated the objectives of prudence in fiscal management, fiscal stability by progressive elimination of revenue deficit, sustainable debt management and greater transparency in the fiscal operations of the Government. To maintain a stable and sustainable fiscal environment consistent with equitable growth, the 13th FC recommended a fiscal consolidation roadmap for the States by amending their Fiscal Responsibility Legislations. The Gujarat State Legislature in March 2011 amended its Fiscal Responsibility Act in line with the recommendations of the 13th FC. Recognising that the fiscal environment should be conducive to equitable growth, the 14th FC recommended that the States should target improving the quality of fiscal management encompassing receipts and expenditures while adhering to the roadmap outlined by 14th FC. The Report Based on the audited accounts of the Government of Gujarat for the year ending March 2018, this Report provides an analytical review of the Annual Accounts of the State Government. The Report is structured in three Chapters. Chapter I is based on the Finance Accounts and makes an assessment of the Government’s fiscal position as on 31 March 2018. It provides an insight into trends of different components of the Government’s receipts, expenditure and borrowing pattern, besides giving a brief account of fiscal imbalances. Chapter II is based on the Appropriation Accounts and gives a grant-wise description of appropriations and the manner in which the allocated resources were managed by the service delivery Departments. Chapter III is an inventory of the Government’s compliance with various reporting requirements and financial rules. The Report also has additional data collated from several other sources in support of the findings. State Finances Audit Report vi vii State Finances Audit Report for the year ended 31 March 2018 for the year ended 31 March 2018 Executive Summary Achievements of the State Government: A Brief Summary The per capita income of Gujarat at ₹ 2,06,447 during 2017-18 was higher than the all India average of ₹ 1,29,800. The State achieved all the targets of major fiscal variables set under the Gujarat Fiscal Responsibility Act, 2005.