The Comptroller and Auditor General of India (CAG) has strongly criticized the Maharashtra government for the widening gap between revenue collection and expenditure, which is increasing the state’s financial burden. In its financial audit report for the year 2022-23, the CAG has recommended that the state prepare a more realistic budget. This report examines various aspects of state finance, including budgetary management, quality of accounts, financial reporting methods, and other related issues.
The report emphasizes the need for the government to create a realistic budget that considers departmental needs and the capacity to utilize allocated resources.
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Tuesday 04 March 2025
Supplementary Budget Concerns
The CAG report also raised concerns about the large amount of unspent funds due to supplementary demands and reallocations without adequate justification. “The state’s budget management needs to be more realistic, as 18.19% of the total allocations remain unused. The total expenditure during the year was 6% less than the original budget, and the supplementary budget constituted 15% of the original budget,” the report states.
Investment Advice
The report advises the state to ensure better value from investments. “The government should take steps to ensure good returns on investments, otherwise, funds borrowed at high costs might be invested in projects with low economic returns,” it states. The CAG suggests measures for rationalizing expenditure, exploring additional revenue sources, enhancing the revenue base, and investing in revenue-generating assets to ensure long-term financial stability. Monitoring and managing debt levels are crucial for this stability.
Mounting Debt
The state’s debt has now reached eight lakh crores, amounting to 18.73% of the Gross State Domestic Product (GSDP), exceeding the 18.14% expected under the Fiscal Responsibility and Budget Management (FRBM) Act. The CAG has warned the government that the increasing debt burden will further strain the state’s finances as previous borrowings need to be repaid.
Political Reactions
Sharad Pawar faction leader Jayant Patil has used the CAG report to criticize the state government. “In my budget discussion speech, I highlighted the lack of asset creation in the state, which has now been echoed in the CAG report. I also pointed out the government’s reckless spending and the unrealistic nature of the budget. The CAG’s observation that ‘the budget should be realistic’ aligns with my concerns,” Patil said.
Patil also accused the government of deceiving the public through the budget. “The CAG report confirms what we have been saying: the government is misleading people with unnecessary subsidies and lack of focus on asset creation. The practice of excessive supplementary demands and end-of-year spending should stop,” he added. “The current administration’s approach seems to be focused on immediate enjoyment at the expense of future generations and the hard-earned wealth of our forefathers.”
