SHILLONG, Dec 29: The report of the Comptroller and Auditor General of India (CAG) for the financial year ended March 31, 2019, revealed that the KHADC was highly dependent on state government funds to meet its financial needs and needed to address this through focused revenue generation activities.
The CAG report tabled in the just-concluded winter session of the council said during 2018-19, the KHADC generated Rs 19.25 crore (30%) from its own sources and taxes, Rs 35.46 crore as share of taxes from the state government (55%), Rs 9.95 crore (15%) as grants-in-aid from the central and state governments, and Rs 10 lakh as recovery of loans and advances
The report said the revenue expenditure of KHADC increased by 27% from Rs 45.95 crore in 2017-18 to Rs 58.58 crore in 2018-19, adding that the increase in revenue expenditure during 2018-19 was primarily due to increase in expenditure on salaries and office expenses under Secretariat General Services from Rs 18.39 crore in 2017-18 to Rs 22.75 crore in 2018-19 (24%), and under Forests from Rs 4.83 crore in 2017-18 to Rs 7.35 crore in 2018-19 (52%).
“As against Budget Estimates (BE) of Rs 213.53 crore in 2018-19, the KHADC incurred actual expenditure of Rs 127.58 crore. Substantial variation between the BE and actual was noted as 70% in receipts and 40% in expenditure during 2018-19,” the report stated.
The CAG report stated that the sudden dip in collection of revenue from mines and minerals by the KHADC in the form of royalty from Rs 71.84 crore (2017-18) to Rs 22.72 crore (2018-19) was on account of non-receipt of its share of royalty on minor minerals for the fiscal 2018-19.
During 2017-18, audit noticed a difference of Rs 61,000 between the closing balance as on March 31, 2017, and the opening balance as on April 1, 2017, requiring reconciliation as this would have a cascading effect on the balances of the succeeding years.
The report stated that the KHADC’s own resources improved from being 13% of total revenues during 2017-18 to 30% of total revenues during 2018-19 while there was a decline in the share of taxes from the state government from 62% in 2017-18 to 55% in 2018-19, and the from the Centre from 25% in 2017-18 to 15% in 2018-19.
The CAG advised the council to take steps to increase its own revenue receipts so that it is able to improve spending on its programmes and schemes.
The total revenue receipts of KHADC decreased 49% from Rs 127.85 crore in 2017-18 to Rs 64.66 crore during 2018-19. The fall in revenue receipts during 2018-19 was primarily due to a 69% decrease in grants-in-aid and 68% reduction in share of royalty on Mines & Minerals.
Similarly, reduction in share of royalty on Mines & Minerals was due to non-receipt of the share of royalty (Minor minerals) for 2018-19.
During 2018-19, the share of grants-in-aid (9.95%), royalty on Mines & Minerals (Rs 22.72 crore) and share of taxes on vehicles (Rs 12.74 crore) constituted 70% of total revenue receipts (Rs 64.66 crore) of the KHADC. As such, the council is primarily dependent on external sources of funds (70%) as against its own sources of funds (30%).
During 2018-19, Secretariat General Services (39%), Forest (13%) and Public Works (8%) accounted for 60% of the revenue expenditure leaving a small percentage for other heads of expenditure including important heads such as Land Revenue, Arts & Culture, and Public Health Sanitation and Water Supply.
The CAG said the council needs to plan the utilisation of available funds adequately.
The shortfall between the BE and actual collection of revenue for the fiscal 2018-19 indicated that KHADC had not been able to make its revenue collection mechanism effective to the extent of the projections made under the BE, the report said.
However, audit observed that the council utilised only Rs 127.72 crore (49%) of total available funds (Rs 262.86 crore) during 2018-19, out of which 23% was spent on revenue expenditure (Rs 258.58 crore) while 26% was spent on capital projects (Rs 69 crore) of the council.
The Secretary to the Executive Council, KHADC stated (August 2022) that steps are being taken to improve budgetary estimation to present a more accurate budget. The CAG asked the council to undertake detailed budgetary analysis and reviews to identify untapped eligible revenue resources and estimate revenue receipts more accurately.
