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Andhra Pradesh

Report of 2010 - Financial Audit on State Finance of Government of Andhra Pradesh

Date on which Report Tabled:
Date of sending the report to Government
Government Type
State
Sector Finance

Overview

Andhra Pradesh Government enacted Fiscal Responsibility and Budget Management (FRBM) Act in October 2005 as recommended by the Twelfth Finance Commission (TFC). It sets out a reform agenda through fiscal correction path in the medium term with long-term goal of securing growth stability for its economy. The State Government's commitment to carry forward these reforms is largely reflected in certain policy initiatives announced in the budgets subsequently. While the benefits of FRBM legislation have been realized to a great extent already, in terms of reduction in major deficit indicators etc. the State Government's resolve to implement VAT, introduction of New Pension Scheme, ceiling on Government guarantees and a host of other institutional and sectoral reform measures will go a long way in building up the much needed fiscal space for improving the quality of public expenditure and promote fiscal stability.

The State Government has established an institutional mechanism on fiscal transparency and accountability as evident from the year-on-year presentation of outcome budgets. These outcome indicators tend to serve the limited purpose of measuring the department-wise performance against the targets.

The Comptroller and Auditor General's civil reports step in to fill this gap. C&AG's reports have been commenting upon the Government's finances for over three years since the FRBM legislation. Since the Audit comments on State Finances formed part of the civil audit report, it was felt that these comments remained camouflaged in the large body of audit findings on compliance and performance audits and hence did not receive due attention. In recognition of the need to bring State finances to centre stage once again, a stand alone report on State Government finances was considered appropriate. Accordingly, from the report year 2009 onwards, it has been decided to bring out a separate volume titled 'Report on State Finances'.

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