The CAG report on Union Government (Civil) tabled in Parliament on Friday also revealed that 61.5 per cent of the total receipt of Rs 5,40,237 crore came through borrowed funds and on the other hand nearly 60 per cent of the total disbursement of Rs 5,40,693 crore was applied towards debt servicing obligations and other liabilities.

According to the report, the increase of revenue receipts decelerated from 15.85 per cent in 1995-96 to 15.22 per cent in 1996-97 and as percentage of GDP decreased from 16.37 per cent in 1995-96 to 16.23 per cent in 1996-97.

Government expenditure as a percentage of GDP decreased from 21.91 per cent in 1995-96 to 21.23 per cent in 1996-97. Expenditure on education, a major component of social sector, as a percentage of GDP also decreased from 0.29 per cent in 1992-93 to 0.25 per cent in1996-97.

The expenditure on economic services sector, which encompasses crucial infrastructural activities, also recorded decline as a ratio of GDP from 32.90 per cent in 1995-96 to 31.09 per cent in 1996-97. On revenue account, expenditure on interest payment increased from Rs 50,045 crore in 1995-96 to Rs 5,94,78 crore in 1996-97 constituting an increase of 18.8 per cent. Thus the revenue expenditure rose by 14 per cent as compared to previous year, interest payment rose by 18.8 per cent.

Interest payment, the report said, constituted 26 per cent of revenue expenditure and absorbed 63 per cent of government's net tax revenue. Expenditure on explicit subsidies on major items increased from Rs 12,876 crore in 1995 to Rs 16211 crore in 1996-97 constituting an increase of nearly 26 per cent.

The report also pointed out that the capital expenditure decreased by 10.49 per cent during 1996-97 over the previous year. As a ratio of GDP, it fell sharply to 1.23 per cent in 1996-97 from the 3.08 per cent in1993-94. A yield of only 2.97 per cent was reported on an investment of Rs 53,194 crore in 243 government companies and corporations.

A total of 18 PSUs did not pay any dividend despite registering post-tax profit of Rs 679 crore.

According to the report, as on March 31, 1997, government investment in nationalised banks was Rs 13,146 crore on which it received a dividend of Rs 210 crore, which was less than 2 per cent of the investment, whereas government paid interest to nationalised banks at 8.7 per cent on securities invested in banks.

Also about 11 per cent of the total funds authorised by the Parliament remained unutilised resulting in a saving of Rs 44,231 crore. Of the total expenditure of Rs 3,76,671 crore, 74 per cent represented charged expenditure. Since charged expenditure is not subject to vote by Parliament, the scope of financial control by legislature was restricted to just 26 per cent of the total disbursements.

The CAG report expressed concern over the fact that against theapproximate saving of Rs 44,231 crore, amount surrendered was Rs 24,787 crore, of which a major portion was surrendered on the last day of the financial year depriving the government opportunity to transfer funds to other needy sectors.