CAG points at lapses by Telangana in obtaining budgetary approvals for spending in 2022-23

The Comptroller and Auditor General of India in its latest report on the Telangana Government State Finances Audit for year ended March 31, 2023, when looking at integrity of budgetary and accounting process, has spelled out five items including taking over of State power distribution utility losses under UDAY, where expenditure has been done without budgetary provision.

The State Government has incurred a huge expenditure of ₹8,985 crore under 48 different sub-heads without any budget provision, it noted. The government auditor, when coming down strongly on the status of the State finances, said “The Finance Department failed to include the following five items, which constituted 98 per cent (₹8,765 crore) of total expenditure without budget provision, despite being aware that expenditure had already been incurred or committed.” 

According to the report, there was non-provision of allocation towards taking over of DISCOMs losses under UDAY after incurring expenditure. In pursuance of a tripartite agreement with DISCOMs and Union Government, the State Government was to take over losses of DISCOMs under Ujwal DISCOM Assurance Yojana (UDAY).

During the year 2022-23, though no amounts were provided towards discharge of this commitment in the Original Budget Estimates, the State Government incurred an expenditure of ₹7,061 crore.

“Since approval for this expenditure from Legislature was not obtained in the Original Budget Estimates and the expenditure was incurred in June and December 2022, Energy and Finance Departments should have obtained approval through Supplementary Provisions from the State Legislature, which was not done for reasons not on record. Thus, the expenditure of ₹7,061 crore was unauthorised,” it observed.

“In fact, in reply to an audit enquiry, the Finance Department informed in November 2022 that it had already incurred ₹6,646 crore in June 2022 towards ‘Taking over losses of DISCOMs under UDAY’. The reply confirms that the Finance Department was aware that the authorisation for expenditure already incurred was required to be obtained through Supplementary Demands,” the auditor noted.

‘Loans to MARKFED’

Besides, UDAY issues of non-provision of allocations or accounted for in different category has been noted by the auditor in Loans to MARKFED, non-provision of allocation in the Supplementary Budget Estimates towards Subvention from Central Road Fund, Unauthorised expenditure on Amount Allocable to the successor State of Telangana through Reappropriation orders, and Non-provision of allocation towards Investment in Telangana State Road Transport Corporation.    

“Overall, there has been a sharp increase in expenditure without approval of the Legislature during the current year at ₹8,985 crore when compared to previous year at ₹1,383 crore mainly on account of ‘Taking over of DISCOMs losses under UDAY’ and ‘Loans to MARKFED’,” it observed stating,  “Incurring expenditure persistently without approval of the budget provision by the Legislature undermines the authority of the Legislature. Such consistent expenditure without authorisation year after year vitiates the system of budgetary and financial control leading to financial indiscipline in management of public resources.”