Ahmedabad: The latest Comptroller and Auditor General (CAG) report has raised serious concerns over the Government of Gujarat’s financial management, budgetary practices, and accounting quality for 2023-24 and preceding years. The audit highlights multiple weaknesses affecting fiscal discipline, expenditure control, and financial accountability.

Fiscal Management Concerns

The report notes that Gujarat failed to achieve its revenue surplus target in 2020-21, as mandated under the Gujarat Fiscal Responsibility Act, 2005. The audit also flagged an overstatement of revenue surplus by ₹7,479.64 crore and an understatement of fiscal deficit by ₹7,483.28 crore in 2023-24. Issues cited include shortfalls in contributions to the Consolidated Sinking Fund, non-transfer of Labour Cess, and unpaid interest liabilities.

The primary balance remained negative in 2019-20 and 2020-21, while the overall liability-to-GSDP ratio rose from 19.51% in 2019-20 to 21.57% in 2020-21, indicating a growing debt burden during the pandemic. Additionally, the government did not discharge interest on certain deposits amounting to ₹264.12 crore and used borrowed funds to meet revenue expenditure, practices considered detrimental to long-term fiscal health.

Budgetary Planning and Implementation Gaps

The CAG report criticizes the state for inadequate budget planning and monitoring. Supplementary provisions of ₹2,414.11 crore in seven grants proved unnecessary, while re-appropriation orders worth ₹11,344.01 crore included unwarranted augmentations or reductions.

Overall budget savings of ₹43,154.58 crore (13.51%) were recorded, with 151 grants utilizing less than 50% of allocations, highlighting unrealistic budget proposals and weak expenditure oversight.

Further issues include ₹353.71 crore in unutilized savings not surrendered, excess expenditure of ₹193.87 crore in 2023-24 pending legislative regularization, and persistent overspending in some grants dating back over a decade. Misclassification of capital expenditure as revenue expenditure, rush of spending at year-end, and misclassification of land acquisition costs were also flagged.

The report also highlighted delays and underperformance in program implementation, such as the Women and Child Development Department, where only 210 of 2,350 planned Anganwadi centres were constructed. Unspent grants worth ₹21 crore by Gujarat Women Economic Development Corporation (GWEDC) remain unreturned.

Quality of Accounts and Financial Reporting Issues

CAG observed significant gaps in accounting practices. Funds totaling ₹21,845.38 crore from the Government of India were directly transferred to implementing agencies, bypassing the state budget. Unutilized Personal Ledger Account balances stood at ₹19,516.56 crore, while 4,745 utilization certificates for grants-in-aid worth ₹11,869.17 crore remained pending across 24 departments.

Other issues include delayed submission of Detailed Contingent bills, partial compliance with Indian Government Accounting Standards, inappropriate use of omnibus heads, unreconciled cash balances, low return on investments (0.56% versus 6.75% borrowing cost), investments in loss-making entities, and inoperative loan accounts totaling ₹833.30 crore.

Capital expenditure was also affected, with 204 incomplete projects (each costing over ₹10 crore) locking in ₹16,402.67 crore. Accounts from autonomous bodies and other state-funded institutions were delayed, and 183 cases of misappropriation and losses worth ₹176.87 crore remain unresolved.

The report concludes that these deficiencies collectively undermine financial control, budgetary discipline, and accountability mechanisms within the Government of Gujarat, raising urgent concerns for fiscal governance in the state. DeshGujarat