CAG Flags Maharashtra Budget Lapses, Says Deficits Understated By Accounting Adjustments

Maharashtra's fiscal management has come under the scanner after the Comptroller and Auditor General (CAG) flagged major budgetary lapses, accounting irregularities and an understatement of key deficit indicators in its audit report for 2024-25, presented in the State Assembly on Friday.

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₹29,742 crore supplementary grants found unnecessary in 62 cases

The audit found that supplementary grants worth Rs 29,742.51 crore sanctioned in 62 cases were rendered unnecessary as actual expenditure did not even reach the original budget estimates. The report also highlighted a sharp year-end spending surge, with 23.40 per cent of the state's total annual expenditure incurred in March 2025, raising concerns over the practice of rushing to utilise budgetary allocations before the close of the financial year.

According to the CAG, revenue expenditure of Rs 4,069.91 crore was incorrectly booked as capital expenditure, while interest liabilities amounting to Rs 762.49 crore on interest-bearing deposits and reserve funds remained unpaid. The audit further noted a short contribution of Rs 3,277.58 crore to the National Pension System (NPS) and the non-transfer of Rs 1,515.23 crore collected as cess, primarily for education and the Employment Guarantee Scheme, to the designated funds.

State’s revenue deficit rises after accounting for irregularities

The report said these accounting adjustments significantly understated the state's fiscal stress. After factoring in the irregularities, Maharashtra's revenue deficit would increase from the reported Rs 29,994.76 crore to Rs 36,342.29 crore, equivalent to 0.80 per cent of the Gross State Domestic Product (GSDP).

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Similarly, the fiscal deficit would rise to Rs 1,44,926.46 crore, or 3.20 per cent of GSDP, after accounting for all liabilities, exceeding the ceiling prescribed under the Fiscal Responsibility and Budget Management (FRBM) framework.

The CAG also observed that the state's outstanding liabilities would increase from Rs 8,59,097 crore to Rs 8,87,422 crore after incorporating off-budget borrowings.

The report added that had unspent balances of Rs 20,993.06 crore lying with various implementing agencies (VPDAs) been credited back to the Consolidated Fund of the State, the revenue deficit could have been reduced substantially to Rs 9,001.70 crore.

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