JOIN USState govt failed to use capital it raised from market borrowings
Government auditor CAG on Tuesday pulled up the Haryana government for improper utilisation of market borrowings raised for the purpose of financing capital expenditure.
The CAG (Comptroller and Auditor General) report on state finances for the year 2012-13, which was tabled on the last day of the Budget session of the state Assembly here, said, “The capital expenditure by government during 2010-11 and 2011-12 was less than the actual market borrowings which shows that the amount of market borrowings were not fully utilised for laid down purpose.”
Haryana government had raised market borrowings of Rs 4,450 crore and Rs 6,356.55 crore for the year 2010-11 and 2011-12, respectively for financing capital expenditure.
However, an amount of Rs 419 crore and Rs 985 crore in 2010-11 and 2011-12, respectively, out of actual borrowings were not used for capital expenditure. The government raised Rs 9,330 crore through market borrowings in 2012-13, of which Rs 5,762 crore were spent for capital expenditure while Rs 3,568 crore were not used for capital expenditure, as per the report.
Haryana’s Finance department in its reply in June last year said, “the notifications brought out by government were erroneous and accordingly the phrase ‘for financing capital expenditure’ has been substituted by expression 'to finance state plan outlay.
CAG while finding the reply untenable, said as per notifications, the loans were raised against sale of securities with the consent of Reserve Bank of India for meeting capital expenditure which were less than market borrowings.
CAG in its report also said that the separate accounts for utilisation of funds obtained from market borrowings were not maintained.
“Instead the funds received were transferred to general pool accounts. As a result, utilisation of loans for objectives for which they were raised could not be vouched safe in audit,” it said in report.
Government raises market loans against sale of stock (securities) by issuing notifications which provided for utilisation of proceeds of loan for financing capital expenditure of development programmes.
The report also said although the actual market borrowings were within the limits fixed by the 13th Finance Commission but the actual borrowings exceeded budgeted market borrowings during 2009-12.