The Comptroller and Auditor General of India termed the budget assumptions of the united Andhra Pradesh government as unrealistic and its expenditure monitoring and control mechanism weak during 2013-14.
The CAG in its report on State Finances found fault with the entire supplementary provision of Rs.11,436 crore and said it was unnecessary as the actual expenditure -- Rs.1,38,612 crore was less than the original budget provision of Rs.1,62,148 crore.
Interestingly post bifurcation too, the residuary Andhra Pradesh Finance Minister made a supplementary provision of Rs.25,527 crore though the government spent only Rs. 86,000 crore during 2014-15 against the budget provision of Rs.1.11 lakh crore.
The CAG report also said despite repeated flagging of the issue, excess expenditure of Rs.530 crore was incurred during 2013-14 without legislative authorisation. Regularisation of such expenditure since 2004-05 amounting to Rs.3,151 crore was yet to be carried out by government by taking legislative approval.
On the debt burden too, the CAG report cautioned that the State would have to fulfil large repayment obligations from 2019-20. The united State had borrowed Rs.85,295 crore from market borrowings and Rs.9,057 crore from Central loans during the five-year period from 2009-14.
The State would be liable to pay Rs.24,252 crore towards debt repayment during 2017-19, Rs.32,902 crore during 2019-21 which would put a strain on the government budgets.
The burden of this share would cause further strain on residuary AP in addition to its existing fiscal deficit and revenue deficit woes.
The State would have to borrow further to repay its debt obligations.
The CAG suggested that a well thought out debt repayment strategy would have to be worked out to avoid additional borrowings.
The CAG report noted that the interest payments on market loans had increased from 4.7 per cent to seven per cent of revenue receipts. While in 2009, the interest payments on market loans was Rs 3,397 crore, the figure touched Rs.7,754 crore in 2013-14.