CAG objects to excess withdrawal of funds in UP

Lucknow, Aug 10 (IANS) The Comptroller and Auditor General (CAG) has objected to rushing the expenditure at the end of a financial year in Uttar Pradesh.

It has also taken strong exception to the failure of successive state governments in Uttar Pradesh to place excess disbursement of Rs 32,533.46 crore under 48 grants for regularisation before the state legislature.

The excess disbursement of funds made from 2005-2006 to 2020-2021, in violation of Articles 204 and 205 of the Constitution of India "vitiates the system of budgetary and financial control and encourages financial indiscipline", the government auditor said in the State Finances Audit Report (for year ended March 31, 2022) placed before the state Assembly here earlier this week.

The CAG has further noted that the excess expenditure over the authorisation and subsequent non-regularisation have been regularly reported in the previous State Finances Audit Reports of Uttar Pradesh.

It has recommended the state government should ensure that all the existing cases of excess expenditure are placed before the state legislature for regularisation.

Leading economist Professor Yashvir Tyagi said: "Disbursement of grants by successive state governments without legislative approval, which has been objected to by the CAG, is not healthy fiscal practice. It also shows a lack of fiscal discipline. In a way it takes away the right of the legislature to scrutinise the funds disbursed and spent by the government. Such a lapse should have been avoided."

The CAG has also objected to lump sum provisions of Rs 7,696.63 crore made by the state government under various heads. Out of this lump sum provision, Rs 4,261.46 crore (55.37 percent of the provision) was actually spent. It mentioned that lump sum provisions of Rs 4,260.01 crore were made for road works, which constituted 27.88 per cent of the budgeted provisions.

Out of this, the actual expenditure was Rs 3,533.50 crore.

"Lump sum provisions without identifying the exact object of expenditure is against transparent budgetary practices," the CAG observed.

The CAG further objected to the practice of rushing expenditure in the last month of the financial year, and recommended that the state government should issue guidelines to control the rush of expenditure towards the closing months, especially in March, in order to maintain a steady pace of spending.

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