The Comptroller and Auditor General of India (CAG) has flagged the use of additional budgetary sources for fee of food subsidy in a report tabled in Parliament on Monday for the monetary yr 2017-18 (FY18) and FY19.
Experts stated making the books of the Food Corporation of India (FCI) public in the Budget for FY22 would go a good distance in plugging this loophole. The CAG report stated the federal government undertook funding of income and capital expenditure utilizing additional budgetary sources in each the years.
Referring to food subsidy, it stated there was a carryover legal responsibility of Rs 81,303 crore of unpaid food subsidy throughout FY18 and then there was contemporary subsidy declare of Rs 1.16 trillion, ensuing in a complete pending legal responsibility for food subsidy of Rs 1.97 trillion. Against this, the federal government launched solely Rs 61,982 crore to the FCI, leaving a pending legal responsibility of Rs 1.35 trillion on the finish of FY18.
It was famous that the budgeted provision of Rs 1.45 trillion for FY18 for assembly food subsidy bills was not totally utilised and there have been financial savings of Rs 48,228 crore on the year-end. These financial savings have been because of a provision of a Rs 42,919 crore mortgage from the National Small Saving Fund (NSSF) to FCI as an alternative of fee of food subsidy utilizing the budgeted funds.
In the following yr, FY19, together with a carry ahead legal responsibility of Rs 1.35 trillion from the earlier years, there was further legal responsibility in the direction of food subsidy of Rs 1.2 trillion for FY19. However, regardless of a budgetary provision of Rs 1.69 trillion for food subsidy in the BE of FY19, solely Rs 70,098 crore was launched from the Budget to partially clear carryover legal responsibility of earlier years.
Payment amounting to Rs 70,000 crore already launched to FCI in the direction of food subsidy was discovered to have been reversed and changed by a mortgage from NSSF, leaving the prevailing Budget provision unutilised to this extent.
This was performed primarily as a measure of compressing income expenditure to include the income deficit. As a consequence, the full carried ahead legal responsibility on account of subsidy arrears rose to Rs 1.85 trillion on the finish of FY19.
“Thus, by not discharging liabilities in full from budgetary sources towards food subsidy on account of PDS operations, revenue expenditure, RD (revenue deficit) and FD (fiscal deficit) at the end of FY18 and FY19 were understated,” it stated. Aditi Nayar, chief economist of ICRA, stated better disclosures associated to the NSSF will enhance transparency and support the evaluation of the federal government’s fiscal place.
The CAG stated regardless of NSSF mortgage to the FCI, there was variance between Budget Estimates of fiscal deficit, income deficit and efficient income deficit and precise numbers. The similar occurred in the next yr, it stated.