CAG Highlights ₹3.17 Lakh Crore Losses, Idle Funds and Fiscal Lapses in FY23 Audit

The Comptroller and Auditor General (CAG) of India, in its audit of the Union government’s accounts for the financial year 2022-23, has identified potential and actual losses, idle funds and fiscal lapses amounting to ₹3.17 lakh crore. 

While the government kept its revenue and fiscal deficits below revised estimates, the audit highlights significant inefficiencies in fund management, recoveries and financial reporting.

CAG Findings On Unutilised Reserve Funds

Between FY19 and FY23, the government collected ₹2.41 lakh crore for 4 specific reserve funds. However, only ₹344 crore was transferred to the designated accounts, leaving an unutilised balance of ₹2.40 lakh crore. This underutilisation raises concerns over the intended deployment of these funds.

Loan Arrears And Short Recoveries

As of the end of FY23, loans and advances worth ₹8.69 lakh crore remained outstanding, with arrears totalling ₹74,241 crore in principal and interest. Short recoveries included ₹113.57 crore in guarantee fees and ₹669.13 crore in dividends from 16 entities. Additionally, compensatory afforestation funds were understated by ₹864.56 crore in the Public Account.

Economic Performance In FY23

Despite these fiscal lapses, the economy recorded a 6.99% rise in real GDP and a 14.21% growth in nominal GDP in FY23. Central government revenue receipts rose 11.36%, driven by a 16.28% increase in net tax receipts. Direct taxes accounted for 53.50% of gross tax revenue, up from 51.14% in FY22, signalling a shift towards a more progressive tax system. GST collections also reached their highest share of GDP in 5 years.

Spending Trends And Public Debt

Government expenditure as a share of GDP declined, though capital outlay inched up to 2.32% of GDP, led by investment in the transport and defence sectors. Debt servicing consumed 61.27% of total spending from the Consolidated Fund. Public debt continued to rise, with a substantial volume of market loans scheduled to mature in FY26.

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Conclusion

The CAG’s audit underscores the importance of prudent fiscal management, timely utilisation of earmarked funds and accurate financial reporting. While economic indicators showed robust growth in FY23, the highlighted lapses point to areas requiring stronger oversight to ensure transparency and efficiency in public finance.

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