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Karnataka fails to spend budgetary funds, says CAG

Bangalore, July 1 (IANS) The Karnataka government failed to spend Rs.13,661 crore from the budgetary allocations made to various departments in fiscal 2008-09, the Comptroller and Auditor General of India (CAG) said.

‘Large amount of funds to the tune of Rs.13,660.83 crore allocated to various state departments such as urban development, water resources, public works, agriculture, horticulture, debt servicing and finance in the budget for fiscal 2008-09 remained unspent,’ the CAG said in a report tabled in the legislative assembly Thursday.

The report also noted instances of inadequate provision of funds and excessive re-appropriations, besides incurring heavy expenditure at the fag end of the fiscal.

‘In several cases, the anticipated unspent provisions were either not surrendered or surrendered on the last two days of the fiscal, leaving no scope for utilising the allocated funds for other development purposes,’ the report pointed out.

The CAG also found that compliance with financial rules, regulations, procedures and directives was unsatisfactory, as evident from the delay in furnishing utilisation certificates for grants given to various institutions.

‘The state government provided grants-in-aid to various bodies and institutions without ensuring that expenditure was incurred for the intended purpose. Delays were noticed in submission of pro forma accounts by departmentally managed commercial undertakings. There were also instances of losses and misappropriations,’ the CAG said.

In another instance, though the central government transferred Rs.2,437 crore during the fiscal under review to the state implementing agencies for central schemes, there was no single agency monitoring its use and data on the amounts spent on major flagships and programmes,’ the report said.

The CAG observed that return on investments (Rs.10,820 crore) made during the fiscal in the loss-making state-run enterprises and corporations was negligible.

‘The share of expenditure on general services declined to 24 percent in 2008-09 from 33 percent in 2004-05 while that of social services increased to 35 percent from 27 per cent during the same period,’ the report said.

Surplus cash balance, resulting from market borrowings of Rs.7,417 crore in the last quarter of the fiscal (2008-09) was invested in 14-day treasury bills at 5 percent interest rate as against interest paid at 7 percent on market borrowings.

‘This has increased the net interest burden by Rs.41.85 crore up to June 2009. The government should borrow only when required and not because funds are available to access,’ the report added.

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