CAG flags Modi govt’s Rs 54,282 crore unaccounted spending
Pradeep Kumar Panda (Darshan Samikhya) Bhubaneswar
In a significant audit finding that raises fresh concerns over fiscal transparency, the Comptroller and Auditor General of India (CAG) has reported widespread irregularities in the Union government’s accounts for 2024–25, including over Rs 54,000 crore in pending utilisation certificates, large-scale misclassification of funds, and persistent weaknesses in financial control systems.The findings, contained in the CAG’s latest report tabled in Parliament earlier this month, point to systemic lapses in the management and reporting of public finances, with several ministries failing to account for funds disbursed as grants-in-aid.As of March 31, 2025, a total of 33,973 utilisation certificates (UCs) involving Rs 54,282.32 crore remained outstanding across 15 ministries and departments. While Rs 38,287.52 crore of this pendency pertains to the three most recent financial years (2021–22 to 2023–24), some cases date back nearly four decades to 1985–86. The delay contravenes Rule 238 of the General Financial Rules (GFR), 2017, which requires submission of UCs within 12 months to certify that funds have been used for their intended purpose.The Ministry of Housing and Urban Affairs accounted for the largest share of pending UCs at Rs 18,272.91 crore, followed by the Department of Higher Education with Rs 14,359.76 crore.The audit also highlighted misclassification of funds amounting to Rs 12,754.47 crore. Of this, Rs 8,742.56 crore was wrongly booked as expenditure due to incorrect use of accounting heads. In one instance, the Department of Atomic Energy recorded Rs 3,089.97 crore of revenue expenditure under capital heads, contrary to prescribed accounting norms.Irregularities were also observed in the classification of receipts worth Rs 4,011.91 crore, with non-tax revenues incorrectly recorded as tax revenues by agencies such as the CBDT and CBIC, potentially distorting the government’s fiscal position.The CAG criticised the continued and extensive use of the omnibus ‘Minor Head 800’—intended for miscellaneous entries as a primary accounting category. In 2024–25, more than half of the expenditure under three major heads (Rs 4,957.58 crore) and over 50 per cent of receipts under six major heads (Rs 4,087.43 crore) were booked under this head, reducing transparency.The report further noted that Rs 9,222 crore collected through levies and cess was not fully transferred to designated reserve funds, including the Prarambhik Shiksha Kosh and the Pradhan Mantri Swasthya Suraksha Nidhi.In addition, 56 instances of adverse balances were flagged across fund heads, indicating persistent accounting discrepancies. A major adverse balance of Rs 44,714.77 crore was reported under the Ministry of External Affairs, attributed by the ministry to an incorrect transfer entry.The auditor also pointed to understatement of liabilities due to the practice of netting in Suspense Heads, which are meant to record transactions pending classification. The Suspense Account (Civil), for instance, was understated by 76.61 per cent. Further, a cash balance of Rs 3,880.67 crore remained unreconciled with the Reserve Bank of India.The CAG has recommended stricter adherence to accounting norms and called for strengthening oversight mechanisms, including the development of a robust digital module within the Public Financial Management System to ensure real-time tracking and reporting of expenditure.
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