CAG flags ‘other expenditure’ spends

More than 50% of the expenditure under 36 major heads of the government’s spending in 2017-18 was classified as ‘other expenditure’ thereby “rendering the accounts opaque”, the Comptroller and Auditor General (CAG) said in a report tabled in Parliament on Tuesday.

The CAG also noted that several heads of cess that had been collected had not been disbursed to the appropriate funds for spending. The quantum of monies lying in limbo like this was a substantial ₹2.18 lakh crore.

‘Authorities’ failure’

“Due to failure of the authorities mentioned… ₹20,855 crore was booked as expenditure under minor head 800 — Other Expenditure during 2017-18,” the CAG observed in the audit report.

“Six GoI ministries/departments booked ₹6,475 crore, representing more than 50% of the expenditure against 10 specific major heads, under the other expenditure category, the auditor said. Similarly, the Comptroller and Auditor Generalfound that 14 central ministries or departments had booked receipts of ₹5,326 crore under the minor head 800-Other Receipts, which, it noted, was more than 50% of the receipts of ₹6,228 crore.

According to the accounting rules, the minor head 800 relating to ‘Other Receipts/ Other Expenditure’ is to be used only in cases when the appropriate minor head has not been provided for in the accounts.

“If such repetitive receipt or expenditure occurs, it is the responsibility of the accounting authorities to open appropriate minor heads,” the auditor observed. “Indiscriminate booking of receipts and expenditure under minor head 800 results in opaqueness in accounts.”

“The accounting authorities of these ministries/departments failed to take corrective action despite the fact that similar comments had been made in previous CAG reports in respect of these ministries/departments,” the auditor said.

The CAG also noted that the funds collected through the various heads of cess had been retained in the Consolidated Fund of India (CFI) rather than being disbursed to the specific funds created for the purpose, despite the CAG having mentioned this problem several times before. One such example was the Secondary and Higher Education Cess.

“The cess was levied in 2006-07 and ₹94,036 crore has been collected so far,” the CAG said. “The cess is being retained in the CFI, contrary to procedure, though a fund [Madhyamik and Uchchtar Shiksha Kosh] for this purpose was created in August 2017, and has not been operationalised so far. This issue has been reported regularly in previous CAG reports,” the auditor noted.

The CAG also mentioned other cess accounts that had been treated similarly along with the amounts that had not been disbursed to the appropriate fund including the Road Cess (₹72,726 crore), the Clean Energy Cess (₹44,505 crore), and the Swachh Bharat Cess (₹4,891 crore).