To finance guarantees K'taka govt availed Rs 37,000 cr loan more than last year: CAG
The central auditor's report was tabled in the Legislative Assembly on Tuesday and the details have surfaced on Wednesday.
The CAG stated, "Implementation of the schemes resulted in the increase in growth of expenditure (12.54 per cent from the previous year) which was the contributing factor of Revenue Deficit of Rs 9,271 crore. Consequently, fiscal deficit of the state also increased from Rs 46,623 crore in 2022-23 to Rs 65,522 crore in 2023-24."
The state in order to finance the guarantee schemes and the deficits arising thereof, availed net market borrowing of Rs 63,000 crore which was Rs 37,000 crore more than last year's net borrowings. The guarantee schemes also reduced the Capex towards infrastructure by around Rs 5,229 crore when compared to previous year, the CAG stated.
The CAG report also gave details of five guarantee schemes implemented during 2023-24. A total budget of Rs 36,537.96 crore was allotted. Under Gruha Laxmi, which provides Rs 2,000 every month to woman head, Rs 16,964 was spent. Under Gruha Jyothi, free power scheme, Rs 8,900 crore was spent. Anna Bhagya free rice scheme (Rs 7,344.68 crore), Shakti free travel for women scheme Rs 3,200 crore was spent and for Yuva Nidhi scholarship scheme Rs 88.88 crore was spent.
The guarantee schemes accounted for 15 per cent of revenue expenditure for the year 2023-24. During the year 2023-24, while the state's revenue grew by 1.86 per cent over last year, its expenditure grew by 12.54 per cent. The increase in growth of expenditure was mainly on the account of the guarantee schemes which was the contributing factor for revenue deficit of Rs 9,271 crore, according to the CAG report.
The report further underlined, "This mismatch of receipt and expenditure during the current year had resulted in state witnessing revenue deficit of Rs 9,271 crore after its recovery during 2022-23 from the Covid-19 economic slowdown.
Consequently, the financial deficit of the state also increased from Rs 46,623 crore in 2022-23 to Rs 65,522 crore in 2023-24.
To finance the guarantees and deficits thereof, the state availed net market borrowing of Rs 63,000 crore which was Rs 37,000 crore more than last year's net borrowings. This would not only increase repayment burden in the near future but also would enormously increase burden of the state, the CAG report warned.
The state has also reduced the Capex towards infrastructure by around Rs 5,229 crore when compared to the previous year. This has an impact on the increase in incomplete projects by 68 per cent when compared to the previous year. This compression in gross capital formation may prove to be detrimental to future growth prospects, the CAG underlined.
Thus, implementation of the guarantee schemes without rationalising existing subsidies/financial assistance or the benefits would place a pressure on state's resources and have an influence on fiscal deficits and debt level as already discussed, the CAG report underlined.
The government in Medium Term Fiscal Plan 2024-28 has projected a revenue deficit of Rs 27,354 crore and thereby increasing its borrowings to Rs 1,05 lakh crore, the CAG report stated.
It also said, state finance department, while accepting the facts during Exit Conference held in January 2025, stated that the five guarantees boosted the local economy, reduced economic disparities and supported human capital development.
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