Audit Reports
Jammu and Kashmir
Report of 2009 - Financial and Performance Audit on State Finance of Government of Jammu Kashmir
Overview
Responding to the recommendations of the Twelfth Finance Commission (TFC),the Jammu and Kashmir Government enacted Fiscal responsibility and Budget Management (FRBM) Act in August 2006. The Act sets out a reform agenda for achieving medium and long term growth stability for the economy of the State through fiscal correction path. To carry out the reforms enshrined in theAct, the State Government took some decisions like introduction of new pension scheme, bringing more items under the ambit of VAT and a host of other institutional and sectoral reform measures as announced in the annual budgets subsequently. The measuresundertaken are intended to improving the quality of public expenditure and to promote fiscal stability. The reforms undertaken have shown signs of improvement in the financial health of the State as the State has done well in maintaining the revenue surplus and there has also been increase in capital expenditure which is encouraging.
The State Government has done well in establishing an institutional mechanism on fiscal transparency and accountability as is evident from the year on year presentation of outcome budgets. These outcomes indicators tend to serve the limited purpose of measuring the department---wise performance against the targets. They do not, however, give the macro picture of the status of financial management including debt position for the benefit of the State Legislature and other stake holders.
The Comptroller and Auditor General's civil audit reports step in to fill this gap. The reports have been commenting upon the Government's finances in its composite reports containing the audit paragraphs, performance reviews as well apart from the chapter on the finances of the State. Since these comments formed part of the civil audit reports, it was felt that the audit findings on State finances remained camouflaged in the large body of the audit findings on compliance and performance audit. The obvious fallout of this reporting was that the financial management portion of these findings did not receive proper attention. In recognition of the need to bring State finances to centre stage once again, a Stand alone Report on State Government finances is considered as an appropriate audit response to this challenge. Accordingly, from the report year 2009 onwards, Comptroller and Auditor General of India has decided to bring out a separate volume titled "Report on State Finances".