Only Rs 23 lakh recovered against outstanding of Rs 923 cr
Lower expenditure on education, health noticed
JAMMU, Apr : The Comptroller and Auditor General of India has painted dismal scenario about the recovery of loans and advances made by the J&K Government to the loss making Public Sector Undertakings (PSUs) and lower priority expenditure on education and health.
In addition to investments in Co-operative Societies, Corporations and Companies, the J&K Government has also been providing loans and advances to other institutions/organizations.
The total outstanding loans as on October 30, 2019 amounted to Rs 1,740.44 crore as a result of net increase of Rs 14.67 crore during the period April 1, 2019 to October 30, 2019. Out of Rs 1,740.44 crore, major portion of loans amounting to Rs 923.96 crore were outstanding as on October 30, 2019 against seven entities.
Moreover, against the outstanding amount of Rs 923.96 crore, only an amount of Rs 0.23 crore was recovered during 2019-20. These seven entities were Municipalities Rs 5.17 crore (nil recovery); social welfare loans to Public Sector and Other Undertakings Rs 87.44 crore (Rs 0.23 recovery); J&K Horticulture Produce Marketing Corporation Ltd Rs 12.67 crore (nil recovery); J&K PDC Rs 85.05 crore (nil recovery); Agro Industries Rs 44.47 crore (nil recovery); J&K Industries Ltd Rs 305.43 crore (nil recovery) and J&K Road Transport Corporation Ltd Rs 383.73 crore (nil recovery).
Stating that recovery of loans and advances during the year 2019-20 was only 0.9 per cent of the outstanding loans, the CAG said, “the poor recovery of loan has resulted in an increase in outstanding balances from Rs 1,725.77 crore on March 31, 2019 to Rs 1,740.44 crore on October 30, 2019”.
It has been observed that out of the total loan amount of Rs 16.29 crore advanced during the period April 1, 2019 to October 30, 2019, the major portion of Rs 7 crore was advanced to J&K State Road Transport Corporation. There was outstanding loan of Rs 376.73 crore against J&K State Road Transport Corporation ending March 2019.
“Despite poor performance of recovery, J&K Government disbursed new loan of Rs 7 crore and no recovery was made during the year. As on October 30, 2019, loan amounting to Rs 383.73 crore was outstanding against Transport Corporation which had accumulated losses of Rs 1,289.66 crore as per their latest finalised accounts”, the CAG said, adding “thus, loans were sanctioned by the J&K Government without ensuring its recovery. Since recovery has been almost negligible, the Government may review its policy with regard to the disbursement of loans and advances to loss making PSUs”.
Enhancing human development levels require the Governments to step up their expenditure on key social services like Education, Health etc. Low fiscal priority (ratio of expenditure under a category to aggregate expenditure) is attached to a particular sector, if the allocation is below the respective national average. The higher the ratio of these components to total expenditure, the quality of expenditure is considered to be better, the CAG said while comparing the J&K’s ratio of capital expenditure and expenditure on health and education with the respective averages for the special category states.
During 2019-20 (April 1, 2019 to October 30, 2019), the J&K’s expenditure priority on education, health and capital expenditure was lower than the respective averages of the Special Category States, the CAG has pointed out.
Pointing towards utilization of borrowed funds, the CAG said that borrowed funds should ideally be used to fund capital creation and developmental activities. Using borrowed funds for meeting current consumption and repayment of interest on outstanding loans is not sustainable.
However, it has been noticed that during 2019-20 (April 1, 2019 to October 30, 2019), 83.25 per cent of borrowed funds were utilized towards repayment of earlier loans, resulting in less availability of borrowed funds for development works, the CAG has further pointed out.
