The Indian rupee.
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The Comptroller and Auditor General (CAG) of India has often appreciated Karnataka for following financial discipline in the state budget-making process, but the same cannot be said about budgetary spending, which is marked by indiscipline. A recent circular by Additional Chief Secretary (Finance) L K Atheeq pulling up departments for sending files for the Finance Department’s perusal and concurrence just on the eve of cabinet meetings, only proves this. While the current budget presented by Chief Minister Siddaramaiah has breached the fiscal discipline that the CAG was appreciative of, by resorting to a revenue deficit of Rs 12,000 crore, certain discrepancies pointed out by the national auditor regarding budgetary spends remain uncorrected. Prominent among them is the tendency to scramble to spend budgetary allocation at the fag-end of the financial year, often leading to a lapse of funds. The other major shortcomings include issuing executive orders for incurring additional expenditure without approval of the legislature, excessive supplementary provisions which are unnecessary, injudicious re-appropriation of funds leading to under-utilisation and failure by departments to return lapsed funds. The Siddaramaiah government had passed an order withholding payment for various projects as many of them had been taken up without any budgetary sanction or legislative approval.
What the Finance Department has now flagged subtly is an attempt by many departments to push dubious schemes or projects without proper scrutiny. According to the Karnataka Government (Transaction of Business) Rules, 1977, the concurrence of the Finance Department is a must for any proposal or project involving financial implications. The Finance Department is required to be consulted before the issue of orders on all proposals which affect the finances of the state. The rules also state that the department shall examine and advise “on all schemes of new expenditure for which it is proposed to make provision in the estimates, and shall decline to provide in the estimates for any schemes which have not been so examined”. According to Atheeq, the Finance Department has to thoroughly examine all proposals and consult with various wings before providing a comprehensive opinion. But some administrative departments expect the Finance Department to give its concurrence without scrutiny and send files just one or two days before the cabinet meeting.
The tendency to dispatch files at the last minute is a clear attempt to escape a detailed examination of the proposal. While the Finance Department should stick to its stand that files should be sent at least one week in advance, the Chief Secretary should ensure that strict action is taken against erring officers. Financial discipline cannot be implemented without first instilling accountability.