A report by the Comptroller General of India on Maharashtra’s financial condition in financial year 2017-18—which has now been tabled in legislative Assembly—has thrown light on many shocking details about debt and non-submission of utilisation certificates. As the state was under BJP rule then, formed CM Devendra Fadnavis is drawing flak for the reported mismanagement.
On page number 67, the report says, “Non-submission of 32750 Utilisation Certificates amounting Rs 65,921.35 crores as on March 31, 2018 indicated lack of proper monitoring by the department in utilisation of grants sanctioned for specific purposes. Further, there was no assurance that the money was actually incurred during the financial year of the purpose for which it was sanctioned/authorised by legislatures. High pendency of UCs was fraught with the risk of misappropriation of funds and fraud.”
Utilisation Certificate is generally issued after completion of work. So, the non-submission of such a huge number of certificates points to a grave issue.
Another important issue highlighted by the report is debt in the state. CAG has clearly said that the state government will have to be cautious now while borrowing. CAG recommends: “The need for closer analysis, monitoring and directed efforts by the state government of Maharashtra towards utilisation of hire existing cash balances, before resorting to fresh borrowings, is urgently indicated.”
The critical financial condition of the state, which is forcing it to repay the debt by borrowing more, is also highlighted in the report. It says on page 51 of the report that, “the average expenditure on debt servicing during 2013-2018 was Rs 34,897 crores which accounted for 88.1 percent of average public debt receipts Rs 39,600 crore during the same period, implying that a larger percentage of debt was being used for debt servicing.”
The CAG also says that the debts are huge and the state government will have to plan accordingly. “The maturity profile of the public debt indicates that the liability of the state to repay the debt during the periods 2018-19, 2019-21, 2021-23 would be Rs 23,088.93 crores, Rs 40,739.91 crores and Rs 60,921.17 crores respectively which may put a strain on the government budget during that period. Further, Rs 1 lakh 84 thousands 356.78 crores i.e. 56.37 percent of the total public debt would be repayable within next seven years.”