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Tuesday 30 March, 2010

CAG calls AP government's bluff

Desaraju Surya
Hyderabad: In a damning indictment, the Comptroller and Auditor General today called the AP government's bluff saying its financial management was “grossly deficient.”
For a state that boasted of presenting its annual budget in excess of Rs one lakh crore for the last three years, the CAG’s latest observations were seen as a rap on its knuckles.
“Financial Management with regard to budgetary practices, expenditure controls and mobilisation of resources was deficient. In fact, budget estimates were totally unrealistic in the all years from 2006-07 to 2008-09 as there was either huge overestimation or underestimation,” the CAG observed in its report (civil) for the year ended March 31, 2009, which was tabled in the state Assembly.
The report was prepared by Principal Accountant General G N Sunder Raja.
The report pointed out to the “huge variations in budget estimates and actual expenditure” with “large unnecessary supplementary grants, non-surrender of anticipated savings (by different departments) and expenditure without provision.”
The CAG also found fault with the government’s tax recovery mechanism saying it was not effective.
“The tax recovery mechanism was not effective and the state government resorted to sale of lands for revenue mobilisation. Arrears of revenue accumulated to Rs 2,413 crore as of March 2008, of which Rs 862 crore (36 per cent) was due for more than five years,” the report said.
During 2006-09, the state government targeted to garner funds aggregating Rs 24,450 crore through sale of land. Against this, it could raise only Rs 10,578 crore (44 per cent) leaving a gap of Rs 13,872 crore. Of this, revenue realised during 2008-09 was just Rs 2,131 crore (18 per cent of the estimate). The percentage of actuals to Budget Estimates under Capital Account decelerated to 65.51 from 99.48 and 98.51 during 2007-08 and 2006-07 respectively, the CAG report noted.
Simultaneously, Revenue Expenditure registered a growth from Rs 39,648.83 crore in 2006-07 to Rs 58,624.76 crore in 2007-08.
“Such a dependence on sale of land would have been appropriate in extraordinary circumstances and that too after exhausting other avenues such as collection of tax arrears and tightening leakage of revenue,” the CAG observed.
Monitoring by Finance Department with regard to utilisation of 12th Finance Commission grants was ineffective resulting in non-release of further grants by the Government of India, the CAG said, adding that Rs 179.55 crore remained un-utilised in urban and rural local bodies.
The CAG, however, patted the government for not availing of Ways and Means Advances for four years in a row due to “better management of cash balances.”
The state government also received debt relief of Rs 1,186.31 crore and Rs 703.08 crore during 2006-07 and 2007-08 respectively from Central Government under Debt Consolidation and Relief Facility due to “good fiscal performance”, the CAG report pointed out.

Sunday 28 March, 2010

The "lull" before the storm?

Desaraju Surya
Hyderabad: There is a certain lull on the political scene in Andhra Pradesh in the past few days as compared to the intense turmoil witnessed over the Telangana separation issue since December last.
It was the five-member Srikrishna Committee, appointed by the Centre to study the situation in Andhra Pradesh, that has brought about the turnaround in the situation, so to say.
The ongoing Budget session of the state Legislature also holds mirror to the current scenario where disturbances, if any, were centered around issues concerning the people – like the unprecedented energy crisis, acute drinking water scarcity, irregularities in implementation of the Mahatma Gandhi National Rural Employment Guarantee Programme, etc. -- rather than political or the state separation demand.
The major political parties that had been engaged in on-street “struggles”, for and against the division of the state since December 9 last year, were confined to the drawing rooms over the last few days, busy drafting their respective points of view on the state bifurcation issue to be presented to the Srikrishna Committee. Their pre-occupation with this documentation process has left little scope for the political parties to engage in any other activity.
This is much pronounced in the Telangana region where even the staunch separatist outfit like the Telangana Rashtra Samiti has kept itself away from the now-extinct Political Joint Action Committee, focusing rather on its own agenda. “All our leaders are pre-occupied with the preparation of a comprehensive report for presentation to the Srikrishna Committee. As such they are not taking part in JAC activities,” TRS spokesman Jagadeeshwar Reddy said.
Of course, the JAC itself died a natural death after the Congress quietly walked out, followed by the BJP, and the Telugu Desam Party “expelled.”
“The state is indeed witnessing a semblance of order after a long gap,” local political analyst M Sivamuni pointed out.
That the political parties and students groups put the agitations on a “pause” mode contributed to an improved law and order situation and restored normalcy.
The Budget session of the state Legislature made the principal opposition Telugu Desam Party and its allies CPI and CPM focus their energies on issues confronting the people. Together they have been fighting the government on issues like price rise, power and drinking water crisis, corruption in NREGP works reservation for Muslims, etc. The BJP, which decided to “boycott” the Srikrishna Committee, has been busy with its organizational matters including election of a new state committee.
Amidst all this, there is hectic activity in the ruling Congress camp what with the long-overdue expansion and reshuffle of the state Cabinet expected to be taken up early April. Every legislator worth the name is virtually jumping over the other to display loyalty to Chief Minister K Rosaiah and remain in his good books as there is talk that he may drop half of his existing Council of Ministers and accommodate new ones.
The prevailing situation is expected to last at least for a few more months since the Srikrishna Committee is seriously into its job. The ensuing biennial elections to Rajya Sabha from the state, followed by polls to urban local bodies in September, will also keep the political parties engaged. Of course, by-elections to 12 Assembly seats in Telangana region -- vacated by 10 TRS legislators and one TDP and BJP MLA each -- should also be held before September.
The political parties will thus be fully “tied-up”, literally!