Skip to main content

CAG pulls up govt for erroneous process of IGST devolution to states

By

 The CAG has pulled up the union government for adopting an erroneous process of devolution of IGST to states and short-transfer of cesses to reserve funds, which resulted in under-reporting of deficit figures for the 2017-18 and 2018-19 fiscals.The Integrated Goods and Services Tax (IGST), which is levied on inter-state sale of goods and services, is shared between the Centre and states in the 50:50 ratio.In its report on the union government accounts tabled in Parliament, the Comptroller and Auditor General of India (CAG) found that a sum of Rs 13,944 crore was left unapportioned and retained in the Consolidated Fund of India (CFI) in 2018-19, even though the amended IGST Act now provides for a process for ad-hoc apportionment of IGST.

 

"Audit of Union Accounts for 2017-18 and 2018-19 disclosed misclassification of revenue expenditure, adoption of an erroneous process of devolution/apportionment of IGST to states, short transfer of cesses to reserve funds and non-adjustment of transactions in suspense relating to If the above get factored in calculations, deficit figures would be higher than reported in the Budget documents, the report tabled in the Lok Sabha on Monday said.

 

It further said the government undertook funding of revenue and capital expenditure using extra budgetary resources (EBR) in both the years.Expenditure met from extra budgetary resources are not part of calculations of the fiscal indicators but have fiscal implications, it said, adding that a clearly laid-out conceptual framework for what constitutes extra-budgetary borrowings and of which entities was lacking.This hampered a comprehensive measurement and disclosure of such borrowings and their impact on fiscal indicators, it said.The report observed that there were variation in deficit figures depicted in Budget at a Glance (BAG) and Annual Financial Statements/Union Government Finance Accounts for both the years, due to netting of certain receipts and expenditure in the receipt and expenditure budgets.Variations were also seen between the liability position disclosed in the Receipt Budget and in the Union Government Finance Accounts, it said.

 

The balances under National Small Savings Fund (NSSF) do not explicitly disclose the substantial accumulated deficit in the fund, which would have to be made good by the government in the future, it said."There is also inadequate disclosure that significant amounts were being provided from NSSF for funding revenue expenditure of the government which would have to be serviced through budgetary support," it said.Refunds (including interest on refunds of taxes) of Rs 1,68,702 crore and Rs 1,81,603 crore were made from gross direct tax collection in the FY 2017-18 and FY 2018-19, but no corresponding disclosure was made in the Union Government Finance accounts, it said.

 

 

30th November,2021 Business Standard.

Comments

Post a Comment

Popular posts from this blog

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

By
  India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said.   Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm
Post a Comment
Read more

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep
Post a Comment
Read more

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

By
  India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem.   “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and
Post a Comment
Read more