Comptroller and Auditor General of Indias (CAG) report for the year ended March 2006, tabled in the Gujarat state legislative assembly on Friday, states that the total fiscal liabilities of Gujarat grew by 14.47$ in 2005-06 over the corresponding fiscal 2004-05. The total debt of Gujarat was at Rs 71,083 crore in 2004-05.
The CAG report also takes note that these liabilities stood at 3.25 times of the revenue receipts and 4.27% of the states own resources at the end of 2005-06. It may be mentioned here that Gujarats debt has been on the rise for the past five years.
The fiscal liabilities of Gujarat in 2001-02 were at Rs 45,301 crore, which increased to Rs 52,572 crore and Rs 62,876 crore in fiscal 2002-03 and 2003-04 respectively. It further increased to Rs 71,083 crore in 2004-05. The CAG report also states that a low or negligible return on investment is a cause of concern for Gujarat.
However, CAG has also brought to notice that the Gujarat government can achieve long-term fiscal stability by measures like compressing non-plan revenue expenditure and enhancing additional resources mobilisation through improved tax.
The report has also taken note of the fact that the finances of Gujarat indicate improvement of all deficit indicators during the year 2005-06. The revenue deficit decreased sharply from Rs 4,037 crore in year 2004-05 to Rs 398 crore in 2005-06, says the CAG report, adding, The fiscal deficit declined to Rs 6,268 crore in fiscal 2005-06 from Rs 8,691 crore during 2004-05. Similarly, primary deficit decreased significantly from Rs 2,612 crore in 2004-05 to Rs 125 crore in 2005-06.
The revenue receipts of the state also grew by 23.7% to touch to Rs 25,067 during 2005-06 mainly on account of a 52% increase in central tax transfers, a 32% increase in grant-in-aid and a 21% increase in its own revenue.