Fiscal prudence back but deficiency noted in off-budget disclosure: CAG

In its report on the government’s compliance in 2021-22 of the Fiscal Responsibility and Budget Management (FRBM) Act, the CAG has, however, flagged “deficiencies in disclosures” pertaining to sovereign guarantees provided to state-run firms to obtain loans, and its off-budget borrowings.

The report was presented in Parliament on Thursday. “The government guarantees given to loans raised by the public sector entities was maintained within the target ceiling of 0.5% of the GDP for the year 2021-22. We noted deficiencies in disclosures in regard to guarantees,” the CAG said in the report. “Disclosure on extra budgetary resources (being a component of the central government debt) was found deficient in respect of completeness,” it added.

The FRBM Act, 2003, was enforced in July 2004 with an objective of ensuring inter-generational equity in fiscal management and ensuring long-term macroeconomic stability. It prescribes the fiscal deficit limits in order to ensure fiscal health. It was amended four times, the latest being in 2018.