Finance ministry spent Rs 1,157 crore in 2017-18 without prior Parliament approval: CAG

By: | Updated: February 13, 2019 7:08 AM

The finance ministry didn’t devise an appropriate mechanism in respect of new service/new instrument of service, which led to the extra spending.

The finance ministry didn’t devise an appropriate mechanism in respect of new service/new instrument of service, which led to the extra spending.

The finance ministry spent as much as Rs 1,157 crore on various heads in FY18 without getting prior approval of Parliament, the Comptroller and Auditor General (CAG) said in a report tabled in the House on Tuesday.

Flagging the issue of under-utilisation of cess, the CAG said while the collection of R&D cess touched Rs 8,077 crore between 1996-97 and 2017-18, only Rs 779 crore — or just 9.6% — was disbursed by the government to the relevant entity (Technology Development Board). Moreover, even after the cess was abolished in April 2017, an amount of Rs 191.41 crore and Rs 1.14 crore was “irregularly collected” during 2017-18 and 2018-19 (up to September 2018), respectively, the auditor said.

The auditor also dwelt upon the persistent “short transfer” of funds with regard to road and clean energy cesses. The “short transfer” of road cess and clean energy cess stood at Rs 72,726 crore and Rs 44,505 crore, respectively, up to March 2018, according to the financial audit of the Union government accounts for 2017-18 done by the CAG.

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It also highlighted that contrary to the established procedure, Rs 94,036 crore collected under the secondary and higher education cess since FY07 was retained in the Consolidated Fund of India, instead of transferring to the fund (Madhyamik and Uchchtar Shiksha Kosh) that was created for this purpose. Some analysts, however, say such a transfer to the relevant fund is just a technicality and what matters is if the funds are indeed spent on the desired purpose or not.

The finance ministry didn’t devise an appropriate mechanism in respect of new service/new instrument of service, which led to the extra spending.

“As per the guidelines, any augmentation of provision by way of re-appropriation to the object heads (i) grants-in-aid (ii) subsidies (iii) major works attracts limitation of New Service (NS)/New Instrument of Service (NIS) and hence requires prior approval of Parliament,” the CAG report said.

Even the Public Accounts Committee (PAC) had also taken serious view on cases of augmentation of provision of object head ‘grants-in-aid’ and ‘subsidies’, the report added. The PAC had noted that these serious lapses are a pointer towards faulty budget estimation and deficient observances of financial rules by the ministries/departments concerned. “Despite the PAC recommendations, ministry of finance had not devised a suitable mechanism, as result of which, during 2017-18 in cases across 13 grants, there was excess expenditure over total authorisation aggregating to Rs 1,156.80 crore without obtaining approval of Parliament,” the CAG report said.

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