Finance Ministry spent Rs 1,157 crore extra in 2017-18 without obtaining prior approval: CAG

February 13, 2019:

The Department of Economic Affairs under finance ministry failed to obtain legislative approval for augmenting provision of for extra expenditure.

The Ministry of Finance spent Rs 1,157 crore on various heads during 2017-18 without obtaining prior approval of Parliament, the Comptroller and Auditor General (CAG) report tabled in Parliament on Tuesday said.

Excess expenditure aggregating Rs 1,156.80 crore was incurred during 2017-18 without obtaining prior approval of Parliament, the CAG report “Financial Audit” of the Accounts of the Union Government said.

The report further noted that the Ministry of Finance did not devise a suitable mechanism in respect of new service/new instrument of service, which led to the extra spending.

The Department of Economic Affairs under finance ministry failed to obtain legislative approval for augmenting provision (for extra expenditure), the report added.

“As per the guidelines, any augmentation of provision by way of re-appropriation to the object heads (i) grants-in-aid (ii) subsidies (iii) major works attracts limitation of New Service (NS)/New Instrument of Service (NIS) and hence require prior approval of Parliament,” CAG report said.

The Public Accounts Committee (PAC), in its 83rd report, had also taken a serious view on cases of augmentation of the provision of object head ‘grants-in-aid’ and ‘subsidies’.

PAC noted that these serious lapses are a pointer towards faulty budget estimation and deficient observances of financial rules by the ministries/ departments concerned.

There is an imperative need on the part of the Ministry of Finance to devise an effective mechanism for imposing financial discipline on all the ministries/departments so as to avoid recurrence of such serious lapses, CAG report said.

“Despite the PAC recommendations, Ministry of Finance had not devised a suitable mechanism, as result of which, during 2017-18 in cases across 13 grants, there was excess expenditure over total authorisation aggregating to Rs 1,156.80 crore without obtaining approval of Parliament,” as per the report. Source Link