17 central govt arms return unspent funds: CAG

NEW DELHI: Seventeen central government arms "persistently" returned the funds allocated to them without spending for three years, severely affecting the delivery of welfare programmes, Comptroller and Auditor General of India (CAG) said here in his audit of the government's accounts for the 2007-08 fiscal.

The figures for the three fiscal years leading to 2007-08 fiscal raise doubts about the effectiveness of the government's promise of spending more on social and infrastructure sectors to boost economic activity till better times.

The CAG report placed before the Parliament on Friday names the Department of Health and Family Welfare, Department of School Education and Literacy, Police, Ministry of Law and Justice, Department of Road Transport and Highways, Department of Urban Development and Department of Heavy industries among those government wings which have persistently returned unspent funds ranging from Rs 100 crore to over Rs 3,000 crore.

Union territories and government owned financial institutions too have returned large funds to the government, the report said.

The government's statutory auditor also said that suspense heads--the receipts and payments that cannot be booked to a final head of account due to lack of information about their nature--is very high in the ministries of defence, railways, posts and telecommunications. This leads to significant distortions in the government's annual accounts, the CAG said.

The report also criticises 'significant degree of opaqueness ' in government accounts as more than Rs 20,000 crore has been classified as 'other expenditure' in Union Government Finance Accounts consulting more than 50% of the total expenditure recorded under 28 major heads of accounts.

The CAG severely criticised the Centre for various practices that led to understatement and overstatement of the accounts. This includes transfer of funds directly to district level autonomous bodies, societies and NGOs for central government programmes without devolving funds through state government accounts. The unspent amount leads to overstatement of expenditure.

The CAG also pointed out that the Rs 1,325 crore retained by capital market regulator Sebi and insurance regulator IRDA outside government account was un-constitutional.

The CAG also said that the government's outstanding liabilities on account of oil bonds alone consistently increased to Rs 71,288 crore as on March 31, 2008, thereby transferring significant liabilities to future generations without appropriately reflecting them in the Union Budget.

Ministry/department, year, returned funds in crores

Department of school education & literacy, 2007-08, Rs 2668

Department of health & family welfare,2007-08, Rs 1467

Department of telecommunications, 2007-08, Rs 1033

Department of higher education, 2007-08, 2952

Ministry of Panchayati Raj, 2007-08, 1082