Bihar spent only 77.95% of the total budget ended in March 2023, surrendered 30.86% : CAG report

The latest Comptroller and Auditor General of India (CAG) report for the year ended March 2023 said that the Bihar Government spent only 77.95% of the total Budget and surrendered 30.86% of the total savings. For the financial year (FY) 2022-2023, the total budget of the State was ₹3,01, 686.46 crore, said the report.

The CAG report which was tabled in the State legislature on July 25, however, said that the State’s Budget outlay (expenditure) grew from ₹1,60, 317.66 crore in 2018-19 to ₹2,35,176.84 crore in 2022-23.

“The State spent only ₹2,35, 176.84 crore (77.95% of the total Budget) and surrendered ₹20, 526.71 crore (30.86%) of the total savings of ₹66,509.62 crore,” said the CAG report for the FY2022-23. “Savings under 10 grants (each having savings of more than ₹2,000 crore) constituted 75% (₹50, 184.74 crore) of the total savings during 2022-23. Most of the savings pertained to Education (₹13,796 crore), Health (₹8,543 crore), Panchayati Raj (₹4,910 crore), Rural Works (₹4,463 crore), Urban Development and Housing (₹4,394 crore), Rural Development (₹3,319 crore) and Home (₹3,258 crore) departments”, the report added.

During the FY2022-23, the State’s GSDP grew at 15.55% over the previous year. However, the liabilities of the State increased by 7.83% as compared to 10.03% in the previous year.

Bihar’s debt

“Internal debt contributed 58.65% of the total outstanding liabilities. There was a net increase in liabilities under internal debt by 13.80% (₹25, 242.78 crore) as compared to 14.60% (₹23, 297.82 crore) in the previous year,” the report said, adding, “During the financial year 2022-23, the Government had not achieved the ratios of revenue surplus and fiscal deficit to GSDP, fixed by the 15^th Finance Commission and set out in the Budget estimates.”

“The outstanding liability-to-GSDP ratio ranged from 31.99% to 40.05% during 2018-23. The State’s overall liability was increasing during the last five years. The major component was internal liability (70.95% during the current year) including market borrowings.”

The CAG report also said that the State government raised ₹686.77 crore as off-budget borrowings, which did not flow into the Consolidated Fund of the State, but is to be repaid and serviced through the budget. “41,755 outstanding Utilization Certificates of ₹87, 947.88 crore were yet to be received by the Accountant General (Accounts and Entitlements), Bihar as on 31 March, 2023,” the report said.

“27,392 Abstract Contingency Bills of ₹7, 489.05 crore were pending for submission of Detailed Contingency Bills as on 31 March 2023. These included 26, 574 AC Bills of ₹ 6,450.17 crore, pertaining upto financial year 2021-22,” it added.

“Out of total 76 State Public Sector Enterprises (SPSEs) 15 working incurred losses of ₹ 2,847.74 crore and their accumulated losses were ₹ 26,991.90 crore upto 2022-23. Net worth of 10 loss making SPSEs was completely eroded by accumulated losses and was ₹ 3,210.48 crore. 59 SPSEs did not adhere to the prescribed timelines regarding submission of Financial Statements and their 1,133 accounts were in arrears as on 31 March’ 2013”, the CAG report said.

‘State fell short of meeting deficit targets’

Reacting to the CAG report, Patna-based economist Sudhanshu Kumar who is an Associate professor at the Bihar Institute of Public Finance and Policy, said the report “has identified higher deficits, increasing subsidies burden and a larger amount of outstanding guarantees as signs of fiscal stress.”

“The audit report highlights that in 2022-23, the State government’s finances fell short of meeting deficit targets, which is unusual considering the State’s history of maintaining fiscal discipline despite limited fiscal space. The year could become an outlier if finances are managed prudently in the later years,” he said.

“However, the state’s debt-to-GSDP ratio remained just within the upper limit suggesting that careful fiscal management could restore budgetary discipline with some control over expenditure. Other findings in the audit report recommend adopting improved accounting practices, which can be achieved through exercising due diligence”, Mr. Kumar told The Hindu.

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