Compliance Financial

Report No.3 of 2018 - State Finances, Government of Bihar

Date on which Report Tabled:
Thu 29 Nov, 2018
Date of sending the report to Government
Sun 19 Aug, 2018
Government Type
Sector Finance


The report is based on the audited accounts of the Government of Bihar for the year ended March 2017, provides an analytical review of the Annual Accounts of the Government. The Report is structured in three Chapters.

Chapter-I is based on the audit of the Finance Accounts and makes an assessment of the Bihar Government’s fiscal position as on 31 March 2017. Chapter-II is based on the audit of Appropriation Accounts and gives Grant-wise description of Appropriations and the manner in which the allocated resources were managed by the service delivery Departments. Chapter-III is an inventory of the Bihar Government’s compliance with various reporting requirements and financial rules.

Audit findings:

While revenue receipts, revenue expenditure and capital expenditure, as a percentage of GSDP, have increased in 2016-17 when compared to 2012-13 even after accounting for inflation, their rate of growth reduced in 2016-17. The rate of growth of capital formation, in particular, was substantially lower.

The State has not achieved revenue surplus and ratio of outstanding debt to GSDP targets of the budget estimates 2016-17, XIV Finance Commission and Bihar Fiscal Responsibility and Budget Management Act.

The primary deficit of the State increased from ` 2,117 crore (2012-13) to ` 8,288 crore during 2016-17 indicating that non-debt receipts were increasingly insufficient to meet the primary expenditure of the State.

The States’ own revenues which had been growing year on year suffered a drop of
` 1,490 crore in 2016-17 primarily because of reduction in revenue of ` 3,112 crore due to imposition of prohibition.

During 2012-17, the State Government incurred a loss of ` 2,190.50 crore on account of difference between the Government’s borrowing cost and the return on investment in various entities.

Out of total grants/appropriations (` 1,69,351.63 crore) in 2016-17, ` 41,353.31 crore
(24.42 per cent) was saved. Out of total savings only ` 29,771.11 crore was surrendered and ` 11,582.20 crore (28.01 per cent of total savings) lapsed during the year. There was cent per cent surrender of funds (more than ` five lakh in each case) in 186 head of accounts under 35 grants/appropriations (total ` 3,421.66 crore). In 11 cases involving 10 grants there were persistent savings ranging between 11.39 per cent to 69.33 per cent of total provision during the preceding five years. In 46 cases, involving 37 grants/ appropriations, supplementary provisions of ` 11,677.83 crore (` 10 lakh and more in each case) proved unnecessary as expenditure was not even up to level of original provision.

The corpus of the State’s Contingency Fund (` 350 crore) has been regularly enhanced, on temporary basis, year after year. In 2016-17, the corpus of the Contingency Fund increased from ` 350 crore to ` 5,787.85 crore and the State Government made
136 withdrawals amounting to ` 4,416.63 crore from the Contingency Fund. Out of these, 61 withdrawals amounting to ` 2,726.35 crore (61.73 per cent)were made for meeting non-contingent expenditure.

HoDs did not reconcile receipts of ` 25,430.49 crore and expenditure of ` 1,00,816.53 crore under 26 receipt and 87 expenditure major heads respectively with the books of the
AG (A&E), Bihar during 2016-17.

Utilisation certificates (UCs) of ` 35,677.41 crore (2,107 UCs) were outstanding as on March 2017 against grants-in-aid bills drawn by 32 departments.

` 4,750.52 crore drawn on 15,575 Abstract Contingent (AC) bills remained outstanding as of March 2017 due to delays in submission of Detailed Contingent (DC) bills.

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