CAG asks Govt to step up fiscal discipline

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New Delhi, December 7:: The country's top auditor CAG asked the Centre to make more efforts to meet its target of eliminating revenue deficit by March 31, 2009 and reform its finances and accounts to use resources more optimally.

The Comptroller and Auditor General (CAG) in its report on Union Government Accounts for 2006-07, presented in the Lok Sabha, also said the Centre's revenue deficit and fiscal deficit fell short of the targets during that year.

Commenting on the outcome of these deficit figures, the report said: "As resources available for application for current services have depleted relative to GDP, it is critical these are used with optimal efficiency. These inefficiencies result from the inability to use the resources in time, delaying projects, and programme implementation rigidities like lapsing out of funds and opacities in budget proposals."

These lacunae call for various measures of reform in government finances and accounts, including its budgetary operations, the report said.

Pointing out that the ratio of revenue deficit to fiscal deficit indicates vulnerability of union finances, CAG said this ratio increased from an average of 46.26 per cent during the seventh five-year plan (1985-90) to the peak level of 124.77 per cent in 2003-04.

It was for the first time that revenue deficit exceeded fiscal deficit, the report said. Subsequent years showed improvement in the ratio, but it was still higher than eighth (1992-97) and ninth plan (1997-2002) periods.