What is CAG?
The Comptroller and Auditor General (CAG) of India is a constitutional authority (Article 148) that independently audits government accounts. CAG reports are submitted to the state legislature. They are the most authoritative independent assessment of a state's actual fiscal health — often revealing what official budgets conceal.
Audit Paras 2023-24
438
Pending Paras (Cumulative)
4,284
Amount Under Objection
₹50,680Cr
Recovery Rate
2.5%
Off-Budget Borrowings Flagged
₹1.49L Cr
Tax Arrears Outstanding
₹54,640Cr
Audit Paras Raised vs Pending
Growing backlog of unresolved findings
Amount Under Objection
₹ Crore under audit query (2018-19 to 2023-24)
Off-Budget Borrowings vs Official Fiscal Deficit
Tax Revenue Arrears
Assessed but uncollected taxes (₹ Crore)
Notable Findings
Key CAG Findings — Tamil Nadu
2023-24
🔴 Off-Budget Borrowings
CAG flagged ₹1.49 lakh crore in borrowings routed through SPVs and PSUs that were not reported in the state's fiscal deficit calculation. These are effectively state liabilities but kept off the official balance sheet to meet FRBM compliance on paper.
Actual fiscal deficit was understated by approximately 2.1% of GSDP. True deficit ~6.8% vs reported 4.74%.
CAG Report on State Finances of TN, 2023-24
2022-23
🟠 TANGEDCO Subsidy Opacity
Electricity subsidy actually paid to TANGEDCO was ₹3,840 crore less than the subsidy amount shown in budget provisions. The gap was funded through TANGEDCO's own borrowings — creating a circular debt loop where TANGEDCO borrows to fill a subsidy shortfall, then needs more state guarantees.
Masks true subsidy cost; pushes TANGEDCO further into debt at commercial interest rates.
CAG Report on PSUs of TN, 2022-23
2022-23
🔴 Revenue Arrears
Outstanding tax and non-tax revenue arrears reached ₹48,280 crore, with commercial tax arrears alone at ₹22,480 crore. Recovery mechanisms have been deteriorating, with enforcement actions remaining low relative to assessed arrears.
Significant revenue foregone annually. Collecting even 25% of arrears would reduce fiscal deficit by ~0.5% of GSDP.
CAG Report on Revenue Receipts of TN, 2022-23
2021-22
🟠 Excess Appropriation
Expenditure of ₹2,924 crore was incurred without legislative approval (beyond Demands for Grants passed by Assembly), requiring post-facto regularisation. This violates Article 266 of the Constitution, which requires prior parliamentary approval for expenditure from the Consolidated Fund.
Weakens legislative financial oversight. The Assembly approves budgets; spending beyond that is unconstitutional without supplementary approval.
CAG Report on State Finances of TN, 2021-22
2021-22
🟠 Guarantee Fee Not Collected
State gave guarantees worth ₹1.27 lakh crore to PSUs but did not collect guarantee fees of ₹1,968 crore, violating FRBM provisions that mandate fee collection as compensation for the risk undertaken by the state.
Revenue loss; implicit subsidy to inefficient PSUs; undermines the risk-pricing discipline that guarantee fees are meant to enforce.
CAG Report on State Finances of TN, 2021-22
2020-21
🔴 COVID Relief Accountability Gap
Utilisation certificates for ₹3,840 crore of COVID relief funds were not submitted. Funds meant for migrant worker welfare and health infrastructure had unverifiable end-use. CAG could not confirm actual delivery of intended benefits.
Accountability gap during a crisis period. No confirmed audit trail for crisis expenditure.
CAG COVID Compliance Audit, 2021
Budget Discipline
Budget Deviations — Year by Year
| Year | Excess Expenditure | Surrendered Savings | Supplementary Demands | Tax Arrears | Amount Under Objection | Recovery Rate |
|---|
Data Sources
CAG Reports on State Finances of Tamil Nadu (Annual — cag.gov.in)
CAG Reports on Revenue Receipts of Tamil Nadu
CAG Reports on PSUs of Tamil Nadu
CAG Performance Audit Reports on various TN schemes
* Approximate figures. All CAG reports available at cag.gov.in