CAG criticizes Assam's 'unrealistic' budget, calls for better fiscal discipline

The Comptroller and Auditor General (CAG) has critically assessed the Assam government's budgetary assumptions for the 2023-24 financial year, describing them as "unrealistic and overestimated," with several supplementary grants approved without the original funds being utilised.

The state incurred an expenditure of Rs 1,39,449.66 crore against total grants and appropriations of Rs 1,69,966.13 crore, resulting in overall savings of Rs 30,516.47 crore. However, these savings, which accounted for 17.95 per cent of total grants and appropriations, were largely notional, as actual receipts fell short of estimated figures.

The CAG report, presented in the Assam Assembly, stated that the budgetary assumptions "continued to be unrealistic and overestimated" during the fiscal year. Actual receipts were reported at Rs 1,38,830.79 crore, compared to the estimated Rs 1,65,215.70 crore, highlighting a significant gap between projections and real income. The report noted, "the savings were notional, as the funds were not actually available for expenditure," indicating that much of the reported surplus was not accessible for departmental use.

Despite the substantial notional savings, only 0.35 per cent (Rs 107.08 crore) of the total savings was surrendered, limiting the possibility for other departments to utilise these funds. The report described this as indicative of "poor" financial management, pointing to an inefficiency in the reallocation process within government departments. The lack of meaningful surrender further contributed to unused funds remaining idle.

The CAG recommended that the state government "may formulate a realistic budget based on reliable assumptions of likely resource mobilisation, the assessed needs of the departments and their capacity to utilise the allocated resources so as to avoid inflated budgeting without corresponding to the available resources". It also suggested that the Finance Department "may review the departments having persistent savings for realistic budget allocation and monitoring of expenditure".

Audit findings also revealed that supplementary grants totalling Rs 30,210.86 crore were approved for 2023-24. However, an analysis showed that only 74.19 per cent of this amount was required, further indicating the disconnect between allocations and actual requirements. The report observed, "Seeking supplementary grants without a requirement is indicative of poor budgetary management by the state government. Further, it is also clear that there is an absence of allocative efficiency and utilisation efficiency by departments, which led to excess expenditure in some grants and savings in others".

In addition to budgetary concerns, the report highlighted persistent issues with financial documentation. As of March 31, 2024, there were 485 annual accounts from 75 autonomous councils, development councils and government bodies, along with 245 annual accounts from 39 public sector undertakings (PSUs), pending submission to the CAG for audit. These delays in submission impacted effective budgetary management and diluted the accountability of these entities.

The non-submission of Utilisation Certificates (UCs) was also cited as a major concern. The CAG report stated that 6,335 UCs, involving Rs 18,669.55 crore from 2005-06 to 2022-23, had not been provided. Without these certificates, it was not possible to verify whether the funds were utilised for their intended purposes, raising further questions about fund management and oversight across departments.

The findings underscore the need for improved budget planning, realistic financial assumptions, and stricter monitoring of fund utilisation within the Assam government. The CAG's recommendations aim to enhance fiscal discipline by calling for closer alignment between allocated resources and actual departmental needs, while also emphasising the importance of timely and accurate financial reporting for effective governance.