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Compliance Financial
Kerala

Report of 2009 - Compliance and Financial Audit on State Finance of Government of Kerala

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

The State Government enacted the Kerala Fiscal Responsibility Act, 2003 with a view to ensure prudence in fiscal management and fiscal stability by  progressive elimination of revenue deficit and sustainable debt management  consistent with fiscal stability, greater transparency in fiscal operations of the  Government and conduct of fiscal policy in a medium-term framework. The  Act came into force on 5 December 2003. According to this Act, the revenue  deficit had to be eliminated by the end of March 2007 and fiscal deficit  reduced to two per cent of the estimated gross State domestic product (GSDP) by the same period. Subsequently, the Twelfth Finance Commission (TFC) recommended elimination of revenue deficit and fiscal deficit to three per cent  of GSDP by March 2009. The State Government could not adhere to these  targets primarily due to adoption of the State Pay Commission's award.               
Therefore, the State had to postpone the achievement of its targets till the end  of March 2011.

The Comptroller and Auditor General of India's Audit Reports have been commenting upon the State Government's finances for over five years since  the Fiscal Responsibility legislation. Since these comments formed part of the  Civil Audit Report, it was felt that the audit findings on State finances  remained camouflaged in the large body of audit findings on compliance and  performance audits. The obvious fallout of this well-intentioned but all- inclusive reporting was that the financial management portion of these  findings did not receive proper attention. In recognition of the need to bring State finances to centre stage once again, a stand-alone report on State   Government finances is considered an appropriate audit response to this challenge. Accordingly, from the report year 2009 onwards, the Comptroller  and Auditor General of India has decided to bring out a separate volume titled 'Report on State Finances'.

Based on the audited accounts of the Government of Kerala for the year ended March 2009, this report provides an analytical review of the Annual Accounts of the State Government. The report is structured in three Chapters.                 
Chapter 1 is based on the audit of Finance Accounts and makes an assessment of the Kerala Government's fiscal position as at 31 March 2009. It  provides an insight into trends in committed expenditure, borrowing pattern besides a brief account of Central funds transferred directly to the State implementing agencies through off-budget route.
Chapter 2 is based on audit of Appropriation Accounts and it gives a grant- by-grant description of appropriations and the manner in which the allocated  resources were managed by the service delivery' departments.                         
Chapter 3 is an inventory of Kerala Government's compliance with various reporting requirements and financial rules. The report also has an appendage of additional data collated from several sources in support of the findings.

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