The 15th Finance Commission headed by Chairman, Shri N.K. Singh today met with the Comptroller & Auditor General of India (CAG), Shri Rajiv Mehrishi and senior officers of the Office of CAG.
The main issues that were discussed during the meeting included – Fiscal Transparency-Lack of underlying conceptual framework under-reporting of Deficit, Debt; Potential risks of absence of revenue deficit as a target; Quality of Capital Expenditure; Asset accounting; Suggestions on Public Expenditure Management; Impact of GST on Revenue; Discussion on Local Bodies; Commitment towards standards-based accounting-GASAB.
Further, the issue of fiscal transparency in the financial reporting of the Union and State Governments was discussed especially in the light of the increasing trend of off-budget and extra-budgetary resource raising by the governments. CAG highlighted the financial risks due to non-transparency.
International standards and amended FRBM Act, 2003 prescribes the inclusion of such off-budget resources to be included in the definition of debt. However, its completeness and reliability in the present form have been a concern for the CAG.
The CAG presented the details on the quality of capital expenditure by various levels of government and the underlying inconsistency in measuring and capturing capital spending.
The CAG also highlighted the need for reforms in government accounting by moving towards standard based accounting in the government.
Apart from above, some insights and observations drawn from CAG’s report of Union and State Governments on expenditure patterns, GST revenue, capital expenditure, etc. were presented to the Commission.
The Commission is slated to meet the CAG again soon.