Bring uniformity, transparency in budget numbers: SBI EcoFlash
Mumbai, Jan 24 (IANS) Given the divergent figures on fiscal deficit being furnished by various agencies, notably the official audit office and the government, a think tank of India’s largest lender has called for uniformity and transparency in budgetary reporting.
“According to the financial audit report of the Comptroller and Auditor General (CAG), the fiscal deficit for 2015-16 was Rs 50,407 crore more than what the government has given in its revised estimates in the Union Budget for 2016-17,” the SBI EcoFlash report said.
“Hence, fiscal deficit as a percentage of GDP in 2015-16 is 4.31 percent according to CAG, compared to 3.9 per cent estimated by the government in budget,” said the report, compiled by State Bank of India’s (SBI) research team, led by Group Chief Economic Advisor Soumya Kanti Ghosh.
It said audit figures remained within budgeted figures before 2005-06, and started reversing and became more pressing after that. It corrected itself in 2013-14 and the year after, but again slipped in 2015-16, with a significant departure.
“Some of the possible reasons for this divergence is the lack of transparency in disclosure of receipts and expenditures. For example, during any year expenditures that need to fall under major heads are classified under the minor head,” it said.
“Another aspect of opaqueness is high degree of aggregation. This aspect has been brought forth by the 12th Finance Commission which has specified eight set of separate statements along with the budget.”
The think tank said the governments continues the practice of using cash-flow based accounting, which makes the process difficult because its financial position at any given point and the changes that take place over time are not provided in the cash based system.
“Government’s liabilities such as accrued liabilities on interest payments due as also dues on account of pensions and superannuation benefits are not reflected. Current assets as well as non-financial assets are not tracked,” it said.
“Cash-based accounting leads to ambiguity, as tax revenues can be collected in excess during a period followed by high incidence of refunds. Payments can easily be deferred and passed on to future, and revenues due in the future could be compromised by providing for one-time receipts,” it said.
“There may be thus enough reasons behind the two different numbers but Government should correct this to have a single figure across the agencies quoting this number.”