For the second year in a row, the Comptroller and Auditor General (CAG) has refused to take responsibility for the Union finance accounts as it has stated in its latest audit findings that government expenditure during 2008-09 is overstated and lacks transparency.
The CAG’s certification for the Union accounts is a must before the government tables it in Parliament. In the finance accounts for 2008-09, that was tabled on Friday, the apex auditor gave a conditional certificate to the government stating that Centre transferred over Rs 83,000 crore directly to state and district level autonomous bodies and NGOs for implementation of various flagship schemes and it was not known how much of this money remained unspent.
“The aggregate amount of unspent balances in their accounts (autonomous bodies, NGOs) maintained outside government accounts is unascertainable. The government expenditure as reflected in the accounts to that extent is overstated,” CAG noted.
Indicating a significant degree of opaqueness in these accounts, the report says more than Rs 28,000 crore under as many as 29 major government expenditure heads had been classified as “Other Expenditure”.
“This constitutes more than 50% of the total expenditure recorded under respective Major Heads indicating opaqueness in these accounts,” the report noted.
It also raised objection to the manner in which the government showed expenditure of Rs 5,785 crore on interest paid on income tax refunds during 2008-09. This was accounted for as reduction in the revenue of the government in the finance accounts.
“Such accounting adjustment is not only against the accounting rules but also results in incurring of expenditure on the interest payments without obtaining Parliament’s approval,” the report observed. It said as a result, the expenditure as well as revenue of the Union government was understated by Rs 5,785 crore.
Commenting on deficits, the report said both revenue and fiscal deficits have increased from Rs 85,000 crore and Rs 1.65 lakh crore in 2007-08 to Rs 3.56 lakh crore and Rs 4.34 lakh crore in 2008-09. While the increase in revenue deficit was 317%, the fiscal deficit went up by 163% compared to the previous year.