Delay in completion of projects increased costs in Andhra: CAG

Hyderabad: The delay in completion of irrigation and road projects in Andhra Pradesh led to cost escalations, the Comptroller and Auditor General said in its report on the state’s finances for the year ending March 2013. [caption id=“attachment_1389751” align=“alignleft” width=“380”]  Reuters[/caption] “Capital works/projects in irrigation and roads sectors were not completed on time, which led to cost escalation on these projects without fully achieving the desired benefits. The investment blocked in such incomplete works/projects as of March 2013 was Rs 71,595 crore (previous year it was Rs 49,516 crore),” the report said. The grants-in-aid from the Centre decreased by Rs 3,140 crore over the previous year, mainly under non plan grants (Rs 2,715 crore) due to non-compliance by the state of the conditions for the release of funds, said the report, tabled in the Legislative Assembly today. Although the state government accorded adequate fiscal priority to development expenditure during 2012-13, it did not ensure that the allocated funds were released fully. “State outlay on education (13.70 per cent) in particular was behind that of the General Category States (17.23 per cent). Further, the share of capital expenditure to aggregate expenditure (12.44 per cent) was also lower in the state, compared to the other General Category states (13.23 per cent),” it said. The return on investment in companies and statutory corporations continued to be poor, and the rate of return on investment was 0.65 per cent during 2008-13, while the rate of interest paid by the government during the period was 7.60 per cent, the CAG report said. The accounts of several of these companies and corporations have been in arrears and up to the year of accounts finalised, the accumulated losses of 14 entities alone amounted to Rs 5,970 crore, with AP State Housing Corporation (Rs 3,617 crore) and AP State Road Transport Corporation (Rs 1,984 crore) at the top of the list. On Financial Management and Budgetary Control, the report said Budgetary assumptions were unrealistic and expenditure monitoring and control mechanism was weak during the year. “The entire supplementary provision (Rs 10,990 crore) proved unnecessary, as the actual expenditure (Rs 1,30,704 crore) incurred was less than the original budget provision (Rs 1,46,243 crore),” it said. Despite flagging the issue repeatedly, excess expenditure of Rs 276 crore was incurred during 2012-13 without legislative authorisation. Regularisation of such expenditure since 2004-05 amounting to Rs 2,876 crore was yet to be carried out by government, the CAG said. PTI