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25
January 2017
Given the divergent figures on fiscal
deficit being furnished by various agencies, notably the official audit office
and the government, a think tank of India's largest lender has called for
uniformity and transparency in budgetary reporting. The Total Investment & Insurance Solutions
"According to the financial audit
report of the Comptroller and Auditor General (CAG), the fiscal deficit for
2015-16 was Rs 50,407 crore more than what the government has given in its
revised estimates in the Union Budget for 2016-17," the SBI EcoFlash
report said.
"Hence, fiscal deficit as a
percentage of GDP in 2015-16 is 4.31 percent according to CAG, compared to 3.9
per cent estimated by the government in budget," said the report, compiled
by State Bank of India's (SBI) research team, led by Group Chief Economic
Advisor Soumya Kanti Ghosh.
It said audit figures remained within
budgeted figures before 2005-06, and started reversing and became more pressing
after that. It corrected itself in 2013-14 and the year after, but again
slipped in 2015-16, with a significant departure. The Total Investment & Insurance Solutions
"Some of the possible reasons for
this divergence is the lack of transparency in disclosure of receipts and
expenditures. For example, during any year expenditures that need to fall under
major heads are classified under the minor head," it said. The Total Investment & Insurance
Solutions
"Another aspect of opaqueness is
high degree of aggregation. This aspect has been brought forth by the 12th
Finance Commission which has specified eight set of separate statements along
with the budget."
The think tank said the governments
continues the practice of using cash-flow based accounting, which makes the
process difficult because its financial position at any given point and the
changes that take place over time are not provided in the cash based system. The Total Investment & Insurance
Solutions
"Government's liabilities such as
accrued liabilities on interest payments due as also dues on account of pensions
and superannuation benefits are not reflected. Current assets as well as
non-financial assets are not tracked," it said. The Total Investment & Insurance Solutions
"Cash-based accounting leads to
ambiguity, as tax revenues can be collected in excess during a period followed
by high incidence of refunds. Payments can easily be deferred and passed on to
future, and revenues due in the future could be compromised by providing for
one-time receipts," it said.
"There may be thus enough reasons
behind the two different numbers but Government should correct this to have a
single figure across the agencies quoting this number."The Total Investment & Insurance
Solutions
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