CAG Report 2023 denotes J&K’s revenue receipts rose by 13%: CM Omar Abdullah

Jammu, Mar 19: Chief Minister Omar Abdullah Wednesday asserted that the revenue receipts of J&K grew by 13 percent in 2021-22 compared to the previous year and J&K was able to manage its finances efficiently, keeping the deficit lower than expected, despite fiscal challenges.

He said this while enlisting positive initiatives and achievements of the J&K government highlighted in the CAG Finances Audit Report for J&K (Report No 1 of 2023), presented in the Parliament on March 28, 2023.

Elucidating positive indicators which found mention in the report, the CM, who also holds the charge of Finance Minister, said that the understatement of the revenue deficit was rectified in consultation with the Principal Accountant General (PAG).

Given these facts, the question of “taking any action” for (alleged) financial irregularities against officials did not arise, CM told the House, in a written reply to a question of the former minister and Congress MLA Tariq Hameed Karra.

Karra had asked whether the government acknowledged the findings of the CAG Finances Audit Report for J&K highlighting serious financial mismanagement vis-à-vis understatement of revenue deficit and fiscal deficit; outstanding liabilities of Rs 29,335.41 crore, in addition to borrowings of Rs 2122.77 crore (JKIDFC) and Rs 10321.83 crore (JKPCL); misclassification of Rs 158.76 crore of revenue expenditure under capex and unutilised funds of Rs 5092.25 crore under 123 schemes, despite developmental needs.

Responding to these queries, the CM explained that the understatement of revenue deficit (Rs 200.29 crore) and fiscal deficit (Rs 41.53 crore), was due to misclassification of revenue expenditure as capital expenditure.

However, it was rectified in consultation with PAG.

He said that the off-budget loans were raised partly to accelerate the completion of past languishing projects of various departments and partly to clear the pending liabilities on account of power purchases as per the schemes introduced by the Ministry of Power during the COVID-19 period.

Regarding the classification of Grant-in-Aid, as pointed out by CAG, the expenditure of those schemes was capital in nature, therefore it was classified as a capital expenditure instead of revenue expenditure, CM Omar said.

“However, the said amount has now been classified as revenue expenditure in consultation with PAG,” he said.

The CM said, “The budget estimates are framed based on advance estimates by various departments. However, savings are available as unutilized funds at the revised estimates stage. Such savings unutilised may be on account of vacant posts, lower expenditure on TE or OE and POL, land acquisition issues or other encumbrances. Such savings are normally used to re-allocate towards fast-moving projects or activities,” he replied.

Responding to a related query, he said that the Finance Department started handling the capex budget from FY 2019-20.

“Since then, the IT-enabled platforms – BEAMS, PAYSYS, PROOF, and Treasury Net have been implemented to ensure real-time tracking of flow of resources and its expenditure ensuring greater transparency and accountability on public expenditure,” the CM said.

Mentioning the positive initiatives and achievements of the J&K government highlighted in the report, he said that the revenue receipts grew by 13 percent in 2021-22 compared to the previous year.

“Own tax revenue increased by 31.88 percent, with State GST rising by 32.13 percent and Excise Revenue by 32.31 percent. Non-tax revenue also grew by 18.74 percent, indicating better revenue collection,” CM Omar said.

Referring to improved budgetary and financial management, he said that the government maintained a minimum cash balance for 62 days without borrowing.

He also referred to an increase in capex by 5.51 percent in 2021-22 compared to the previous year while mentioning infrastructure development.

The CM also mentioned achievements related to urban development projects; water supply and sanitation improvement; capex on medical and public health; road transport infra; power sector infra; progress in government schemes and public sector investments and performance highlighted in the CAG report.