CAG Exposed Financial Misadventures Of KCR Government: Congress

Former minister Mohammed Ali Shabbir today demanded that Chief Minister K Chandrashekar Rao respond to the serious observations made by the Comptroller & Auditor General of India (CAG) in its reports on the state's finances.

Shabbir Ali said that the CAG, in its audit report for the year ending in March 2020, which was tabled in the Legislative Assembly on March 15, had pointed out that the state government had been spending public money without "adequate justification" and without the approval of the legislature.

The CAG, in Chapter 3 of the report, had said, "Budgetary assumptions of the state government were not realistic during 2019-20, and control over the execution and monitoring of the budget was inadequate. Supplementary Grants/Appropriations were obtained without adequate justification, and in some cases, despite the legislature not approving supplementary provision, expenditure was incurred."

He said that the CAG had once again described the budgets of the TRS government as unrealistic.

"The CAG has mentioned that the budgetary estimates of the state government were not realistic. The words unrealistic / not realistic were used at least eight times in the 162-page report with specific references to the financial mistakes committed by the KCR government. The CAG itself has advised the state government to take corrective measures for realistic estimation in the future," he said.

The Congress leader said that it was not the first time that the TRS government was rebuked by the CAG. While CM KCR had been making false claims of Telangana becoming the best-performing economy, the CAG, the 15th Finance Commission and other financial entities had clarified on more than one occasion that the TRS government was lying about the growth figures, Shabbir Ali said.

He claimed that the GSDP growth estimates were based on wrong figures of revenues. The CAG itself had pointed out that the state government was counting even loans and borrowings as revenues. The reality was that Telangana was facing a serious financial crisis, he said. It had taken huge loans at high interest rates and had given guarantees to various institutions. The situation was so bad that the CAG in its report specified that the state government was not fully disclosing all the guarantees given by it to various institutions.

Shabbir Ali alleged that the TRS government had been cheating the people by making hollow promises. KCR did not maintain the sanctity of the state budget by not spending even 50% of the allocations on several welfare schemes. Referring to the observations made by the CAG in its reports, he said that of Rs. 6,225 crore provided towards the scheme for debt relief to farmers, only an amount of Rs. 213 crore was spent. Similarly, of Rs. 5,000 crore provided towards construction of free two-bedroom houses for the urban poor, only Rs. 550 crore was spent. And the expenditure on education and health too had drastically reduced in the last few years.

"Telangana is now an almost bankrupt state with loans of over Rs. 4 lakh crore. Any individual who understands the balance sheet will confirm that Telangana is completely mired in bad debts. The hard-earned money being paid by the people as taxes will be used to pay heavy interests and installments of loans procured by KCR to build irrigation projects which benefited his contractor friends more than the common people. It will take at least a generation - nearly 30 years - for the people of Telangana to come out of debts accumulated by the TRS government in the last 6-7 years," Shabbir Ali said.

The Congress leader demanded that KCR respond to the CAG's observations to give clarity on Telangana's financial situation. He also advised the Chief Minister to implement the recommendations made by the CAG.