Transcript AUDITING BUDGET PROCESS / IMPLEMENTATION IN INDIA

PUBLIC DEBT IN
INDIA
JAYANT SINHA & AM BAJAJ
SAI INDIA
1
STRUCTURE OF PRESENTATTION
SAIs APPROCH TO PUBLIC DEBT
PUBLIC DEBT OF CENTRAL GOVERNMENT
FISCAL RESPONSIBILITY LEGISLATION
2
DEBT & CONSTITUTIONAL
PROVISIONS
NO CONSTITUTIONAL LIMIT TO BORROWINGS BY
CENTRAL GOVT.
STATE MAY NOT WITHOUT THE CONSENT OF THE
GOVT OF INDIA RAISE ANY LOAN IF THERE IS
STILL OUTSTANDING LOAN WHICH IS OF THE
STATE WITH THE GOVT OF INDIA.
3
SAI INDIA & ITS ROLE
INDIA HAS A FEDERAL CONSTITUTION- WITH A
CENTRAL GOVERNMENT & 28 STATES.
EXTERNAL AUDIT FOLLOWS A UNITARY
STRUCTURE- THE CAG, IS THE CAG OF INDIA- OF
BOTH THE CENTRAL GOVT. & OF THE STATES.
REPORTS OF THE CAG ARE THEREFORE TABLED
IN PARLIAMENT & THE STATE LEGISLATURES
SEPARATELY FOR THE CENTRAL GOVT. & STATE
GOVTS.
4
SAI INDIAAPPROCH TO PUBLIC DEBT
AUDITED SEPARATELY FOR THE CENTRAL GOVT. &
STATE GOVTS.
COMMENTS, ANNUALLY, ON LEVEL & COMPOSITION
OF PUBLIC DEBT IN REPORT ON ACCOUNTS OF THE
GOVT. OF INDIA.
A SEPARTE AUDIT REPORT ON PUBLIC DEBT OF GOVT.
OF INDIA WAS PREPARED BY SAI INDIA IN 1994.
COMMENTS, ANNUALLY, ON LEVEL & COMPOSITION
OF PUBLIC DEBT ALSO FIND MENTION IN AUDIT
REPORTS OF STATE GOVERNMENT WHICH ARE
PLACED IN THEIR LEGISLATURE.
5
AUDIT COMMENTS ON DEBT
•
AUDIT COMMENTS HAVE BEEN MADE ON
– DEBT SUSTAINABILITY
• DEBT STABILIZATION
• LEVEL OF NON DEBT RECEIPTS
• NET AVAILABILITY OF BORROWED FUNDS
• BURDEN OF INTEREST PAYMENT
• MATURITY PROFILE OF GOVT. SECURITIES
6
AUDIT COMMENTS ON DEBT
– PERSISTENCE OF PRIMARY AND REVENUE
DEFICITS OVER THE YEARS WHICH WOULD
LEAD
TO
AN
ACCUMULATION
OF
GOVERNMENT DEBT.
– IMPORTANCE
OF
EXERCISING
SOUND
EXPENDITURE CONTROL MEASURES.
7
PUBLIC DEBT OF CENTRAL
GOVERNMENT
MACROECONMIC POSITION OF THE GOVT. OF
INDIA HAS BEEN FAVOURABLE IN THE RECENT
PAST.
GDP GROWTH HAS BEEN CONSISTENTLY HIGHER
THAN GROWTH OF LIABILITIES OF GOVT. OF
INDIA IN THE RECENT PAST.
SINCE 2005-06 DEBT(LIABILITIES) TO GDP HAS
WITNESSED A STEADY DECLINE.
8
FISCAL RESPONSIBILITY
LEGISLATION
GOVT. OF INDIA ENACTED IN 2003 THE FISCAL
RESPONSIBILITY LEGISLATION. IN 2004 RULES IN
THIS REGARD WERE FRAMED.
THESE
ENVISAGE
GREATER
FISCAL
TRANSPARENCY.
CENTRAL BANK TO ONLY PROVIDE BORROWING
ACCOMMODATION TO THE CENTRAL GOVERNMENT
TO MEET TEMPORARY CASH MISMATCHES ONLY.
RESTRICTIONS PLACED ON ASSUMING ADDITIONAL
LIABILITIES.
9
FISCAL RESPONSIBILITY
LEGISLATION
IN 2012 THE CENTRAL GOVT. AMENDED THE
FISCAL RESPONSIBILITY LEGISLATION BY WHICH
SAI INDIA IS TO REVIEW PERIODICALLY THE
COMPLIANCE TO THE LEGISLATION.
SUCH A REPORT BY SAI INDIA IS TO BE TABLED IN
PARLIAMENT.
THIS ENTAILS A NEW SET OF RESPONSIBILITY
BEING CAST ON SAI INDIA.
EXPERIENCE OF OTHER SAIs INVOLVED IN
VALIDATING
FISCAL
RESPONSIBILITY
LEGISLATION
WOULD
BE
IMMENSELY
VALUABLE.
10
THANK YOU
11
Trend of Growth of National Income
and Liabilities
20
18.35
18
16.94
14.08
14
12
14.33
13.32
11.58
11.31
11.34
10
8
15.19
15.55
16
7.50
6
4
2
0
year
GNI Growth
Liabilities Growth
12
GOVT. OF INDIA- DEBT TO GDP
RATIOS
60
55.18
51.43
52.92
50
43.31
45.15
40
30
Debt/ GDP ratio
20
10
0
1995-96
2000-01
2005-06
2010-11
2011-12
13