THIRUVANANTHAPURAM: An accounting illusion performed by the Finance Department in the last month of the 2013-14 fiscal has lost its spell and is accelerating the state economy’s downfall.
Deccan Chronicle had earlier reported that there was a virtual development freeze in the month of March, 2014. The total plan expenditure during the month was Rs 65.5 crore; virtually zero or, to be more precise, 0.39 per cent of the total plan outlay (Rs 16,589 crore) for the fiscal.
The Planning Board itself had stated that spending till the end of February was 57.45 per cent. So we concluded that the total spending for the fiscal that ended in March was just below 58 per cent. Contradicting this, the Planning Board said the total plan spending for the fiscal was 80 per cent. This meant that 22 per cent of the plan outlay, or Rs 3,740 crore, was utilized in the month of March, a time when revenues were drying up.
Now, a Finance Department note on the current fiscal crisis has exposed the ledger book sleight of hand. “A substantial percentage of this excess expenditure has been parked by departments in the savings back account of the Treasury. The attempts to withdraw the money have increased the pressure on the economy,” the note says.
In other words, the Finance Department demonstrated an expenditure of Rs 3,740 crore without spending anything. Here is how the imaginary spending took place. The Department drew up bills showing that the remaining plan funds kept in the Treasury were withdrawn by the government departments. But before the departments could get hold the money, they were asked to deposit the money in the Treasury Savings Bank account. Account books recorded the expenditure but money just flowed from one arm of the Treasury (revenue account) to another arm (public account). An illusory transfer. Now, the departments have started asking their money back and the Treasury is in shock.
