Hyderabad: The Comptroller and Auditor General (CAG)’s report has taken the steam out of the Telugu Desam’s accusations of financial bungling by the Y.S. Jagan Mohan Reddy government. It highlighted the mismanagement under the chief ministership of N. Chandrababu Naidu.
The ‘State Finances Audit Report 2019’ tabled in the Andhra Pradesh Assembly on the last day of the winter session on Friday referred to several instances of financial mismanagement like diverting employees’ insurance fund, unproductive investments, excess dependence overdraft facility and failure to contain revenue deficit.
After losing power last year, the Telugu Desam has made the alleged financial mismanagement by the YSRC government a major issue to target the Chief Minister. Y. Ramakrishnudu, former finance minister and senior TD leader, has several times demanded imposition of financial emergency in the state to “save” it from further bankruptcy.
The CAG mentioned in its report that the “Government incorrectly used funds that belong to its employees and created uncertainty in respect of beneifts due to the employees” besides enhancing the avoidable financial liability to the government. The accounting agency found that there was a short transfer of `663 crore to the National Securities Depository Limited.
The CAG highlighted the low-return investments made by the Naidu government in 2018-19 fiscal. The government's investments in statutory corporations, government companies and others were `9,500 crore of which unapportioned investments were `8,400 crore which is 88 per cent of investments.
“The average rate of return on investment was negligible at 0.01 per cent, far lower than the average rate of interest the government paid on its borrowings which is 6.37 per cent,” it pointed out.
With regard to availing the overdraft facility, a sign of pure fiscal management, the CAG highlighted that the government could maintain the mandated minimum cash balance for just 115 days with the Reserve Bank of India while it depended on ways and means, overdraft and special drawing facility to meet the requirement for the remaining period of the 2018-19 financial year. It also found that the government directed the corporations to put their deposits in PD accounts so that the minimum cash balance can be achieved.
Referring to the huge revenue deficit, the CAG said the revenue deficit had exceeded the ceiling prescribed by the 14th Finance Commission “for the last four years” (which means the entire duration of TD rule) despite release of post devolution revenue deficit grant by the commission.
