The report of Comptroller and Auditor General of India for 2007-08 was presented in the Punjab Assembly today.

The report says that all three deficits-- revenue, fiscal and primary-- have increased in 2007-08. "The emergence of revenue deficit along with a sharp increase in fiscal deficit and a steep increase in primary deficit over previous year apparently indicates weak fiscal health of the state," it states.

State's tax revenue increased by Rs 882 crore (9.78 per cent), the non-tax revenue decreased by Rs 2,490 crore (32 per cent) in 2007-08 over the previous year. Pattern of expenditure of the state also indicates that expenditure on salaries, pensions, interest payments and subsidies amounted to 71 per cent of the total expenditure, leaving relatively less sources for effective delivery and expansion of social and economic services.

Further capital expenditure, excluding loans and advances, has shown a decrease of Rs 395 crore.

The report also pointed to the paltry returns on investments made in statutory corporations, joint stock companies and cooperatives.

"The investment stood at Rs 3,836 crore during 2007-08, but there were negligible return on these (less than half a per cent) vis-à-vis the higher cost of borrowed funds," it says.

The report also covers the performance audit of construction and maintenance of state highways and district roads. "Budget estimates were unrealistic as unwarranted restrictions were made in revised budget estimates," it states.