CAG Pushes for Uniform Fiscal Reporting Across States Starting FY28

The Comptroller and Auditor General (CAG) has directed all states to adopt a uniform accounting framework starting FY28, marking a major reform in India’s public finance reporting. The notification, issued on November 11, seeks to eliminate inconsistencies in expenditure and revenue classification, enabling more reliable fiscal comparisons across governments. The move is expected to enhance transparency and strengthen fiscal governance.

New Framework for Expenditure Classification

Under the revised system, states must follow a common list of Object Heads, granular codes used to record expenditure components such as salaries, allowances and grants. Currently, reporting practices vary widely, with some states grouping salaries with medical reimbursements or travel allowances. Grant-in-aid classifications also differ despite uniformity in major heads, making cross-state analysis challenging.

Faster Monthly Reporting Timelines

The CAG has advanced timelines for compiling Monthly Civil Accounts, a key tool for tracking state fiscal performance. While states earlier submitted accounts by the 25th of the following month, nearly ten states now report by the 10th and another eight by the 15th. Quicker availability of spending and revenue data will help analysts identify fiscal stress with shorter lags and improve policy responsiveness.

Mineral Revenue Reforms

Another major change focuses on tightening the reporting of mineral receipts. The new structure distinguishes royalties from coal, lignite, iron ore and non-ferrous minerals, and separately identifies contributions to the National Mineral Exploration Trust (NMET) and State Mineral Exploration Trust (SMET). This granular approach aims to improve transparency in resource revenue accounting.

Read More: India GDP Expected to Reach 7.5% In Q2 FY26.

Conclusion

The CAG’s accounting reforms represent a significant step toward modernising state fiscal systems. By standardising expenditure classifications, accelerating monthly reporting and refining mineral revenue disclosures, the framework will enhance comparability and accountability. These measures are expected to strengthen fiscal governance and align state practices with global public finance standards.

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