State Finances Audit Report of the Comptroller and Auditor General of India for the year ended 31 March 2020 Government of Chhattisgarh Report No. 03 of the year 2021 Table of Contents Paragraph Page No. No. Preface -- vii Executive Summary -- ix Chapter I: Overview Profile of the State 1.1 1 Gross State Domestic Product of the State 1.1.1 1 Basis and Approach to State Finances Audit Report 1.2 3 Report Structure 1.3 4 Overview of Government Accounts Structure 1.4 4 Budgetary Processes 1.5 7 Snapshot of Finances 1.5.1 7 Snapshot of Assets and liabilities of the Government 1.5.2 8 Fiscal Balance: Achievement of deficit and total debt targets 1.6 9 Compliance with Provisions of State FRBM Act 1.6.1 9 Medium Term Fiscal Policy Statement 1.6.2 10 Deficit and Surplus 1.6.3 11 Trends of Deficit/Surplus 1.6.4 12 Deficits after examination in Audit 1.6.5 13 Chapter II: Finances of the State Introduction 2.1 15 Sources and Application of Funds 2.2 15 Resources of the State 2.3 17 Receipts of the State 2.3.1 17 Revenue Receipts 2.3.2 18 Trends and growth of Revenue Receipts 2.3.2.1 18 State’s Own Resources 2.3.3 19 Own Tax Revenue 2.3.3.1 20 State Goods and Services Tax (SGST) 2.3.3.2 21 Non-Tax Revenue 2.3.33 22 Central Tax Transfers 2.3.3.4 22 Grants-in-Aid from Government of India 2.3.3.5 23 Fourteenth Finance Commission Grants 2.3.3.6 24 Capital Receipts 2.3.3.7 24 State’s performance in mobilization of resources 2.3.4 25 Application of Resources 2.4 25 Growth and composition of expenditure 2.4.1 26 Revenue Expenditure 2.4.2 28 Major Changes in Revenue Expenditure 2.4.2.1 29 Committed Expenditure 2.4.2.2 29 Undercharged Liability under National Pension System 2.4.2.3 31 Page i State Finances Audit Report for the Year ended 31 March 2020 Table of Contents Paragraph Page No. No. Parking of Government’s contribution for National Pension System in 2.4.2.4 31 the Personal Deposit Account Subsidies 2.4.2.5 31 Financial assistance by the State Government to Local Bodies and 2.4.2.6 32 other Institutions Capital Expenditure 2.4.3 33 Major changes in Capital Expenditure 2.4.3.1 33 Quality of Capital Expenditure 2.4.3.2 34 Quality of investment in Companies, Corporations and other Bodies 2.4.3.2.1 34 Investment and Returns 2.4.3.2.2 34 Loans and Advances by State Government 2.4.3.2.3 35 Capital blocked in incomplete projects 2.4.3.3 36 Expenditure priorities 2.4.4 37 Object head wise expenditure 2.4.5 37 Public Account 2.5 38 Net Public Account Balances 2.5.1 38 Reserve Funds 2.5.2 39 Consolidated Sinking Fund 2.5.3 40 State Disaster Response Fund 2.5.4 40 Guarantee Redemption Fund 2.5.5 41 Debt management 2.6 41 Debt profile: Components 2.6.1 42 Components of fiscal deficit and its financing pattern 2.6.2 44 Debt profile: Maturity and Repayment 2.6.3 45 Debt Sustainability Analysis (DSA) 2.7 46 Fiscal Deficit and Debt Sustainability 2.7.1 46 Utilisation of borrowed funds 2.7.2 46 Status of Guarantees – Contingent Liabilities 2.7.3 47 Management of Cash Balances 2.7.4 48 Conclusion 2.8 50 Recommendations 2.9 50 Chapter III: Budgetary Management Introduction 3.1 51 Budget Preparation Process 3.2 51 Financial Accountability and Budget Review 3.3 52 Gender Budget 3.3.1 52 Youth Budget 3.3.2 52 Agriculture Budget 3.3.3. 53 Major Policy Initiatives/New Schemes 3.3.4 53 Appropriation Accounts 3.4 53 Page ii Table of contents Table of Contents Paragraph Page No. No. Summary of Appropriation Accounts 3.4.1 53 Sub-optimal Utilisation of Budgeted Funds 3.4.2 54 Comments on Integrity of Budgetary and accounting process 3.5 55 Expenditure incurred without authority of law 3.5.1 55 Misclassification of capital expenditure as revenue expenditure 3.5.2 55 Unnecessary of excessive supplementary grants 3.5.3 57 Unnecessary or excessive re-appropriation 3.5.4 58 Entire budget provision not utilised under sub-heads 3.5.5 58 Large savings/surrenders 3.5.6 59 Missing/ Incomplete Explanation for Variation from Budget 3.5.7 60 Excess expenditure and its regularization 3.5.8 61 Rush of Expenditure 3.6 63 Sub-Head (Schemes), where entire expenditure was incurred in 3.6.1 63 March 2020 Review of Selected Grant No- 13-Agriculture 3.7 64 Grant No. 13- Agriculture 3.7.1 64 Budget and expenditure 3.7.2 64 Surrender of Savings 3.7.3 65 Unnecessary supplementary grant and subsequent surrender under the 3.7.4 65 schemes Persistent savings under Scheme Heads 3.7.5 66 Savings of Entire Budget Provision during 2019-20 3.7.6 67 Conclusion 3.8 67 Recommendations 3.9 68 Chapter IV: Quality of Accounts & Financial Reporting Practices Introduction 4.1 69 Delay in Submission of Utilisation Certificates 4.2 69 Parking of Grants in Aid fund outside the Government Account 4.2.1 70 Pending DCC Bills 4.3 72 Timeliness and Quality of Accounts 4.4 73 Outstanding balances under Suspense and DDR Heads 4.5 73 Personal Deposit (PD) Accounts 4.6 74 Funds relating to Land acquisition kept in PD account 4.6.1 75 In-operative PD accounts 4.6.2 76 Accounting of Transactions Relating to Central Road Fund 4.7 76 Funds outside Consolidated Fund or Public Account of the State 4.8 76 Year-wise receipt and utilisation of Labour Cess 4.8.1 76 Booking under Minor Head 800 4.9 78 Booking of Royalty in unspecified Head of Account 4.9.1 79 Non-Reconciliation of Departmental Figures 4.10 80 Page iii State Finances Audit Report for the Year ended 31 March 2020 Table of Contents Paragraph Page No. No. Reconciliation of Cash Balance 4.11 81 Compliance with Indian Government Accounting Standards 4.12 82 Submission of Accounts/Separate Audit Reports of Autonomous 4.13 82 Bodies Delay in finalisation of accounts of Public Sector Undertakings 4.14 83 Cases of Losses and Defalcation, etc. 4.15 84 Off Budget Borrowing 4.16 84 Liabilities after examination in Audit 4.16.1 86 Follow-up on Audit Reports 4.17 86 Conclusion 4.18 86 Recommendations 4.19 87 Page iv Table of contents Table of Contents Appendices Appendix Page No. No. State Profile 1.1 89 Time Series Data on State Government Finances 2.1 90 Details of Schemes which are 100 per cent women centric during 2019-20 3.1 93 Details of Schemes which are 100 per cent Youth centric during 2019-20 3.2 94 Details of Major Policy initiatives/New Schemes (`1 crore or more in each 3.3 96 cases) where entire Grant not utilised Details of cases where supplementary provision (`50 lakh or more in each 3.4 97 case) proved unnecessary List of Sub Heads where entire Budget provision is not utilized (`10 crore or 3.5 99 above) List of grants having large savings (savings above `100 crore) during the year 3.6 103 List of grants having large savings (savings above `500 crore) during the year 3.7 107 Details of surrender of funds in excess of (`10 crore) at the end of March 3.8 108 Sub-Heads requiring Explanation for Variation in Appropriation Accounts 3.9 111 Excess Expenditure over provision for the year 2000-01 to 2018-19 3.10 114 Details of Major Heads having excess in 2019-20 3.11 116 Sub-Head (Schemes, where entire expenditure was incurred in March 2020 3.12 117 Major head wise position of outstanding Utilisation Certificates 4.1 122 Details of outstanding Detailed Contingent bills as of 31st March, 2020 4.2 122 Statement of Major Head wise Receipt booked under Minor Head 800- Other 4.3 123 receipt Statement of Major Head wise Expenditure booked under Minor Head 800- 4.4 123 Other expenditure Investment by the State Government in PSUs whose accounts are in arrear as 4.5 124 on 1 October 2020 Department/category wise details in respect of case of loss to Government 4.6 125 due to theft, defalcation, loss of Government property/material Year wise analysis of loss to Government (Cases where financial action was 4.7 126 pending at the end of 31 March 2020) Details of recovery in various departments 4.8 128 Page v Preface This Report has been prepared for submission to the Governor of Chhattisgarh under Article 151 of the Constitution of India. 2. Chapter I of this Report contains the basis and approach to State Finances Audit Report, structure of the Report, structure of Government Accounts, budgetary processes, trends in key fiscal parameters like revenue surplus/ deficit, fiscal surplus/ deficit, etc. and fiscal correction path. 3. Chapters II and III of the Report contain audit findings on matters arising from an examination of the Finance Accounts and Appropriation Accounts respectively, of the State Government for the year ended 31 March 2020. Information has been obtained from Government of Chhattisgarh, wherever necessary.