Audit Reports
Jharkhand
Report of the Comptroller and Auditor General of India on State Finances for the year ended 31 March 2009, Government of Jharkhand
Overview
In response to the Twelfth Finance Commission's recommendation, the Government of Jharkhand enacted its Fiscal Responsibility and Budget Management (FRBM) Act in May 2007, with a view to ensure prudence in fiscal management and fiscal stability by progressive elimination of revenue deficit, sustainable debt management consistent with fiscal deficit, greater transparency in fiscal operations of the Government and conduct of fiscal policy in a medium term fiscal framework. The State Government's commitment to carry forward these reforms is largely reflected in the policy initiatives announced in the subsequent budgets. The benefits of FRBM legislation have been realised to some extent in terms of reduction in major deficit indicators etc, the State Government's resolve to implement value Added Tax (VAT), introduction of the New Pension Scheme and a host of other institutional and sectoral reform measures will go a long way in building up the much needed 'fiscal space' for improving the quality of public expenditure and to promote fiscal stability.
The State Government is in the process of establishing an institutional mechanism on fiscal transparency and accountability as evident from the year-on-year presentation of data on State Finances. This data however, does not give the big picture of the status of financial management including the debt position, off-budget liabilities, cash management etc. for the benefit
of the State Legislature and other stakeholders.
The Comptroller and Auditor General's Audit Reports have been commenting upon the Government's finances for over three years since the FRBM legislation. Since these comments formed part of the Civil Audit Reports, it was felt that the audit findings on State finances remained camouflaged because the majority of audit findings were on compliance and performance aspects. The obvious fallout of this all-inclusive reporting was that the audit findings in financial management portion of these findings did not receive proper attention. In recognition of the need to bring State finances to centre-stage, a stand-alone report on State Government finances was considered an appropriate audit response to this challenge. Accordingly, from the report year 2008-09 onwards, the Comptroller & Auditor General of India has decided to bring out a separate volume titled 'Report on State Finances.'