Sunday, December 11 2005 12:26 Hrs (IST) - World Time -

Patna: The Comptrand Auditor General of India has found glaring violation of constitutional provisions and lack of budgetary and expenditure control in the management of Bihar's finances resulting in expenditure without provisions and injudicious appropriation of funds leading to large savings in crucial sectors like health and education.

CAG's report for the year ended March 31, 2004, when Rashtriya Janata Dal (RJD) was in power, says the overall fiscal liabilities of the state increased from Rs 30,612 crore in 1999-2000 to rs 37,453 crore in 2003-04.

These liabilities as ratio to the gross state domestic product (GSDP) increased from 42.5 per cent in 1999-2000 to 62.6 per cent in 2003-04 and stood at three times its revenue receipts and 11.67 times its own resources comprising its tax and non-tax revenues.

The report, the latest by CAG, says in violation of the provisions of Article 204(3) of the Constitution, the State Government incurred excess expenditure of Rs 1550.55 crore in five voted grants and Rs 2231.79 crore in four charged appropriations in 2003-04 which required regularisation under Article 205 of the Constitution which was not done.

As per Article 205 of the Constitution, it is mandatory for the State Government to get the excess over a grant or appropriation regularised by the state legislature. However, the excess expenditure amounting to Rs 11,249.96 crore for years 1977-78 to 2003-04 had not been regularised till November 2004 'in a breach of legislative control over appropriation'.

"Non-adherence to the tenets of budget formulation and budget management led to injudicious appropriation of funds resulting in large savings under various heads like health, education, welfare, public works etc.," the CAG noted.

It said that in 11 cases involving nine grants, substantial savings of Rs 100 crore or more in each case totalling a staggering Rs 2425 crore (74 per cent of total savings) were noticed.

Reasons for savings were not intimated by the departments except in a few cases where the reasons given were non-release of funds by Government of India for centrally sponsored schemes, reduction of plan outlay, posts kept vacant and non-drawal of funds due to restrictions imposed by the State Government.

In violation of the budget manual, expenditure of Rs 1249.22 crore was incurred on six schemes and services without any provision in the original estimate or supplementary demand or any re-appropriation order.

In a reflection of the disorder prevailing in the management of public finances, the CAG pointed out that while supplementary provision of Rs 635.19 crore obtained in 58 cases between August, 2003 and March, 2004 was 'wholly unnecessary' as the expenditure did not come up even to the level of original provision, in five cases, supplementary provision of Rs 376.8 crore proved insufficient.

Interestingly, in five cases when the spending department surrendered the grants / appropriations or portions thereof to Finance Department in anticipation of savings, Rs 545.69 crore was surrendered even though the expenditure of Rs 10,904.12 crore was in excess of total provision of Rs 7124.56 crore indicating 'inadequate budgetary control'.