The Comptroller and Auditor General (CAG) of India, which is empowered to audit all receipts and expenditures from the Government of India and the State governments, has pulled up the Bihar government headed by chief minister Nitish Kumar for indiscreet utilization of funds. The CAG is especially amazed at the unnecessary withdrawals from the Contingency Fund and using the borrowed funds for repayment of borrowings and interests thereupon.

Nitish has been in power for the past 15 years since November 2005.

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According to the CAG report 2019 which was tabled on the floors of the Bihar assembly on Monday, the corpus of the State’s Contingency Fund of Rs 350 crore has been regularly enhanced on a temporary basis, year after year. Right now, the total State’s Contingency Fund stands at Rs 6403.42 crore, very much against Rs 500 crore which is the Contingency Fund of India. However, the CAG’s main objection is for unnecessary withdrawals from this fund.

“During 2017-18, the state government made 126 withdrawals amounting to Rs 4, 949.21 crores from the Contingency Fund. Out of these, 35 withdrawals amounting to Rs 314.49 crore (6.35 percent) were made for meeting expenditures which were clearly non-contingent in nature, violating Constitutional provisions,” the CAG report said. The CAG has now asked the Finance Department to review the practice of such a large annual increase in the Contingency Fund corpus and also ensure the advances from this fund are utilized only to meet urgent expenditures.

The CAG report has further expressed concern over the way 80 to 85 percent of the borrowed funds were utilized for repayment of borrowings and interest thereupon which implies that the State was spending less on development activities. According to the report, the primary deficit of the State has increased nearly double-fold in the past four years which indicates “non-debt receipts were insufficient to meet the primary expenditure of the State as well as to meet the Interest Payment.

The report stated that the revenue receipts in 2017-18 grew by 11 percent as compared to the previous year but were lower than the budget estimates by Rs 19, 711 crores. Similarly, revenue expenditures in 2017-18 grew by eight percent but were lower than the budget estimates of Rs 19, 979 crores while Capital expenditure in 2017-18 increased by six percent but was lower than the budget estimates of Rs 3, 289 crore. “The Finance Department should rationalize the budget preparation exercise so that the persisting gap between budget estimates and actual is bridged,” the CAG report recommended.

The report said the Bihar government incurred a notional loss of over Rs 3, 479 crores on account of the difference between the Government’s borrowings cost and the return on investment in various entities. According to the report, out of 127 projects worth over Rs1, 819 crores due for completion during 2011-12 to 2017-18, the costs were revised only for three projects. The details of the remaining 124 projects were not furnished.

As per the report, out of the total savings of Rs 46, 396.66 crores, only Rs 34, 570.64 crores was surrendered while the remaining Rs 11, 826.02 crore which comes to 25 percent of total savings lapsed during the year. Further, Rs 19, 042.51 crore, which is 55 percent of the total surrender was surrendered on the last working day of March 2018. The reports said there was a cent percent surrender of funds in 189 heads of accounts.

The report further reveals that the accounts of 30 working PSUs/Corporations and 37 non-working PSUs/Corporations are in arrears from one to 22 years and one to 41 years respectively in violation of the Companies Act/Acts of respective statutory corporations. The CAG report adds that Rs 6, 162.68 crore drawn on 15, 214 Abstract Contingent (AC) bills remained outstanding as of March 2018 due to delays in submission of Detailed Contingent (DC) bills. The CAG has now asked the Finance Department to ensure all controlling officers adjust AC bills pending beyond the prescribed period in a time-bound manner. It says that disciplinary actions could be initiated against officers/officials who draw funds on AC bills to avoid lapse of budget.