The revenue receipts registered an impressive growth of over 25% during the current year over the previous year, due to a growth in own tax and non-tax revenue.
For the 5th consecutive year, Andhra Pradesh has registered a revenue surplus while keeping the fiscal deficit well within the prescribed ceiling.
In its report on the State Finances for the year ended 31 March 2011 presented in the state Legislative Assembly on Monday, the Comptroller & Auditor General of India said that the state has done well to bring down the fiscal liabilities at the end of the current year to 24.52% of the GSDP against a ceiling of 30.3% prescribed under FRMB Act and 25% recommended by the 13th Finance Commission by 2014-15.
According to CAG, the revenue receipts registered an impressive growth of over 25% during the current year over the previous year, due to a growth in own tax and non-tax revenue.
While the revenues were Rs. 12,880 crore last year, this year they were Rs. 16,318.
However, there was also an increase in arrears of revenue by 385 over the previous year.
The growth in own tax revenue was due to an increase in sales tax and state excise, and the growth in non-tax revenue was due to an increase in interest receipts and increased collections from non-ferrous mining and metallurgical industries.
The CAG said that the revenue expenditure has increased by over 23% or Rs. 15,086 over the previous year - both in plan and non-plan segments - due to interest payments and increased assistance to local bodies.
The capital expenditure, however, decreased by about 19% (Rs. 2,670 crore), and the ratio of capital expenditure to total expenditure fell significantly during the year. This was despite the government's commitment while presenting the 2010-11 budget to increase the capital expenditure to ensure growth.
As much as Rs. 46,330 crore has been blocked on incomplete projects and works over the years, depriving the anticipated benefits to the targeted segments of population.
The CAG pointed out the state funds earmarked for specific social sector activities were not always released on time or not released at all, thereby negating the objective of allocating these funds.
The CAG advised that the government ensure better tax compliance to improve its own tax revenue and reduce the arrears of revenue. It should also explore the possibilities of making certain state-provided services like irrigation viable in the medium to long term.
It said that the central government has been transferring about Rs. 12,174 crore directly to the state's implementing agencies for the implementation of various flagship programmes in socio-economic sectors. As these funds are not routed through the the state budget / state treasury system, Finance Accounts do not capture the flow of these funds, and to that extent, the state's receipts and expenditure as well as other fiscal variables/parameters derived from them are underestimated.
The CAG also asked the government to formulate an action plan expeditiously, to complete all the pending projects, especially irrigation projects, within a specified timeframe, to ensure that the envisaged benefits accrue to the targeted beneficiaries.
Also, the government should prioritise the areas that need capital expenditure, especially in socio-economic sectors, the CAG advised.
The government needs to re-prioritise the outlay in respect of the social sector and ensure that funds are released based on approved outlays and spent for the purpose sanctioned, the CAG said. (INN)