The Comptroller and Auditor General of India (CAG) has asked the state government to seek better value for money in its investment. In a report tabled in the Assembly on Friday, the CAG said it was a matter of concern that there was a negative resource gap of Rs 4,862 crore despite positive indicators in terms of debt stabilisation and increased net availability of borrowed funds.
The report, for the year ended March 2009, described the investment of high-cost borrowed funds in projects with low financial returns as an unsustainable proposition.
The report also pointed out that the average return on the government investments in statutory corporations, rural banks, joint stock companies and co-operatives was 0.5 per cent in the last three years.
In the same period, the government paid an average of 8.4 per cent as interest on its own borrowings.
CAG pointed out that the inordinate delay in completion of projects, particularly irrigation projects, in the state had resulted in blocking of capital and suggested tighter budgetary controls.
It also called for strengthening internal controls as government money amounting to Rs 9.47 crore had been reported lost due to misappropriation, default and theft.