Special Correspondent

CHENNAI: The Tamil Nadu government should seek better value for money in its investment, suggested the Comptroller and Auditor General of India.

The report on State finances for the year ended March 2009 described as “an unsustainable proposition,” the investment of high-cost borrowed funds in projects with low financial returns.

The report, which was tabled in the Assembly on Friday, pointed out that the average return on the government investments in statutory corporations, rural banks, joint stock companies and co-operatives was 0.50 per cent in the last three years. In the same period, the government paid an average of 8.4 per cent as interest on its own borrowings.

The report also said it was a “matter of concern,” that there was a negative resource gap (Rs.4,862 crore) despite positive indicators in terms of debt stabilisation and increased net availability of borrowed funds.

It has been also pointed out that the inordinate delay in completion of projects, particularly irrigation projects, in the State had resulted in blocking of capital.

The report also suggested tighter budgetary controls.

It also called for strengthening internal controls in all the organisations as government money amounting to Rs.9.47 crore had been reported lost due to misappropriation, defalcation and theft.