Borrowed funds: CAG report questions UP
The Comptroller-and-Auditor-General (CAG) has now questioned the Uttar Pradesh government for servicing debt with borrowed funds.
In a recent report of CAG (state finances and civil) for 2008-09 tabled in the ongoing state Assembly’s Budget Session, it said almost 97 per cent of borrowed funds were used for discharging debt liabilities in the last two years.
However, in the Uttar Pradesh Budget proposed for 2011-12, the public debt of the state is likely to touch `2,04,000 crores vis-a-vis `1,88,000 crores in the current financial year. Meanwhile, the CAG indicated the state’s fiscal gains of 2007-08 showed deterioration in 2008-09. “The sixth pay commission award had also put pressure on expenditure,” pointed the CAG report. The report states that the per capita capital expenditure of the state was below the national average, although the government had given adequate fiscal priority to capital expenditure during 2008-09. “The average return on investments in statutory corporations, government companies, joint stock companies and cooperatives was 0.007 per cent during the last three years, while the average interest outgo was 6.49 per cent on borrowings during the period,” also states the report. Earlier in the week, UP state principal secretary had said that the public debt ratio to gross state domestic product will decrease to 32.1 per cent in the next financial year.
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