Gandhinagar: Latest audit reports from the Comptroller and Auditor General of India (CAG) have revealed a complex financial landscape for Gujarat in the 2024–25 fiscal year. While the state’s economy demonstrated resilience with a 10.15% growth in Gross State Domestic Product (GSDP), it simultaneously faced a 1.89% decline in revenue receipts, primarily due to falling non-tax revenues and reduced grants from the Central Government.

Revenue Surplus Under Scrutiny

The state recorded a revenue surplus of ₹18,943 crore, a sharp 43.41% decrease from the previous year’s surplus of ₹33,477 crore. However, auditors warned that this figure is overstated by ₹11,928.97 crore. This overstatement occurred because the state failed to discharge significant mandatory liabilities, including contributions to the National Pension System (NPS), the Consolidated Sinking Fund (₹4,396 crore), and various building and construction welfare cesses. Factoring in these unpaid obligations, the actual revenue surplus would be approximately ₹7,014 crore.

Widening Fiscal Deficit

The state’s fiscal deficit surged to ₹48,965 crore, representing 1.83% of the GSDP. Although this remains within the 3% limit mandated by the Fiscal Responsibility and Budget Management (FRBM) Act, the CAG noted a significant “tightening of fiscal space,” necessitating increased market borrowings to fund capital projects.

Irregularities in Housing and Food Systems

Subject-specific audits uncovered serious management lapses in major social schemes:

PMAY-Gramin: Auditors found that ₹36.84 crore in interest earned on scheme funds had not been deposited back into government accounts as of May 2023. Furthermore, 81% of ‘false success’ transactions and 97% of ‘false rejected’ transactions in selected talukas remained unreconciled.

Public Distribution System (PDS): Discrepancies in weighing and accounting at taluka godowns raised “concerns about the accuracy of stock records” and highlighted potential leakages in foodgrain distribution.

Accountability and Documentation Gaps

The CAG expressed concern over the weakening of financial accountability mechanisms. As of March 2025, 4,258 Utilization Certificates (UCs) for grants-in-aid totaling ₹7,432 crore were outstanding. Additionally, 5,378 Abstract Contingent (AC) bills amounting to ₹554.73 crore remained unadjusted for long periods, which auditors warned increases the risk of misappropriation.

Rigid Spending Patterns

The reports highlighted an increasingly rigid expenditure structure. “Committed expenditure”—which includes salaries (₹60,427 crore), pensions (₹26,530 crore), and interest payments (₹28,025 crore)—now consumes roughly 53% of the state’s revenue receipts. When subsidies of ₹26,212 crore are included, this “rigid” spending rises to 65%, leaving the state with limited flexibility for other developmental needs.

CAG Recommendations

To address these fiscal challenges, the CAG has urged the Gujarat government to:

• Establish a standardized process for periodic stock reconciliation to prevent PDS leakages.
• Develop an effective mechanism to reconcile transactions in housing schemes to avoid double payments.
• Ensure all undischarged liabilities are disclosed transparently to reflect an accurate fiscal position.
• Strengthen monitoring systems to ensure that autonomous bodies and departments submit accounts and utilization certificates within stipulated timeframes.

Information regarding the state’s GSDP (₹26,72,025 crore) is based on advance estimates provided by the Department of Economics and Statistics, Government of Gujarat. DeshGujarat