Gujarat govt investments may lead to unsustainable debt: CAG
In the last three years, the average returns on Gujarat govt`s investments has been 0.22%, while it had paid an interest of 7.85% on its borrowings, a CAG report has said.
Gandhinagar: In the last three years, the average returns on Gujarat government`s investments has been 0.22 per cent, while it had paid an interest of 7.85 per cent on its borrowings, a report by the comptroller and auditor general (CAG) of India has said.
"The average return on Government`s investments in statutory corporations, rural banks, joint stock companies and co-operatives was 0.22 per cent in the last three years, while it paid an average 7.85 per cent interest on its borrowings between 2007 and 2010," according to the report tabled in Gujarat Assembly today.
"Increasing fiscal liabilities accompanied by negligible rates of returns on government investments might lead to unsustainable debt in the medium to long term."
Outstanding fiscal liabilities of the state government have shown a steady increase over the last few years. The liabilities have risen from Rs 71,083 crore at beginning of 2005-06 to Rs 1,19,117 crore by the end of 2009-10, the CAG report stated.
The government made interest payments on debt and other liabilities totalling Rs 8,590 crore which constituted 18 per cent of the revenue expenditure of Rs 48,638 crore during 2009-10, it said.
Revenue expenditure is the expense on acquiring or upgrading the physical assets.
The fiscal deficit, where total expenditure exceeds revenue, of Gujarat increased from Rs 5,648 crore in 2006-07 to Rs 15,153 crore in 2009-10 against Rs 12,148 crore projected in the medium term fiscal policy statement(MTFPS).