The Comptroller and Auditor General (CAG) of India has pulled up the Odisha government for inefficiency in revenue realisation from state public sector undertakings (SPSUs), leading to non-remittance of over Rs 5,000 crore.
As per the latest CAG report on state finances for 2024–25, tabled in the Assembly on Tuesday, as many as 27 SPSUs failed to remit Rs 5,146.76 crore in dividends despite reporting profits, in violation of the state’s dividend policy. The Finance Department did not even raise demand for these dues, indicating serious lapses in financial oversight.
Budgetary management emerged as another weak area. Against a total budget provision of Rs 2.87 trillion, the state could utilise only Rs 2.31 trillion, leaving unspent savings of Rs 56,157 crore (19.5 per cent). The CAG attributed this to unrealistic budgeting, inflated provisions, and inadequate implementation capacity. Departments such as Sports and Youth Services and Panchayati Raj and Drinking Water were specifically blamed for poor utilisation.
The audit also flagged the non-regularisation of excess expenditure amounting to Rs 386.84 crore over multiple years, in violation of constitutional provisions under Article 205. In terms of liabilities, although the overall debt ratio improved, the state faced significant repayment pressure in the near term.
“Around Rs 76,642 crore, constituting 56 per cent of total borrowings, is due for repayment over seven years, raising concerns over refinancing and liquidity risks. While debt sustainability improved until 2022–23, it weakened thereafter due to rising borrowings and persistent primary deficits,” the report stated.
Serious deficiencies were observed in financial reporting and fund management. The state accumulated undischarged liabilities of Rs 911.97 crore, including unpaid interest, pension contributions, and cess transfers. Additionally, Rs 2,499.76 crore remained parked in Single Nodal Agency (SNA) bank accounts, undermining efforts to streamline fund flow under the SPARSH system.
On the expenditure side, the audit observed that revenue expenditure continued to dominate, consuming 87.69 per cent of revenue receipts in 2024–25. While committed expenditure declined over the years, offering some fiscal breathing room, subsidy expenditure surged dramatically by over 121 per cent to Rs 9,134 crore, largely driven by payouts under the Samrudh Krushak Yojana.
Capital expenditure showed an improvement, rising to Rs 45,481 crore and increasing its share in total expenditure to 22 per cent. However, the audit flagged instances of misclassification and accounting irregularities that inflated capital spending figures. An expenditure of Rs 721 crore of a revenue nature was booked as capital expenditure, while Rs 586.62 crore was transferred to personal ledger accounts towards the end of the financial year without immediate utilisation.
The audit further highlighted a worrying rise in pending utilisation certificates (UCs), which climbed to Rs 16,585.45 crore across 12,050 cases, reflecting weak monitoring and accountability. Similarly, pending AC/DC bills surged by 171 per cent over five years, increasing the risk of misappropriation of public funds.
Irregular fund parking was also flagged, with Rs 11,417.84 crore lying in Personal Deposit accounts as of March 2025. Of this, Rs 647.52 crore was transferred in the last two months of the financial year without immediate requirement, possibly in an attempt to avoid budget lapses, the report pointed out.
Odisha’s economy registered moderate growth of 11.4 per cent during 2024–25, with gross state domestic product (GSDP) rising at a compounded annual growth rate of 13.3 per cent — from Rs 5.4 trillion in 2020–21 to Rs 8.9 trillion in 2024–25. Despite this growth momentum, the audit flagged several concerns that may constrain the state’s fiscal capacity going forward.
At a macro level, the state maintained a revenue surplus of Rs 22,651 crore (2.54 per cent of GSDP) and contained its fiscal deficit at Rs 25,042 crore (2.81 per cent of GSDP), within the prescribed 3 per cent limit. The debt-GSDP ratio also declined to 15.48 per cent, well below the 25 per cent ceiling, indicating prudent fiscal management on the surface.
However, the CAG cautioned that underlying vulnerabilities such as under-realisation of revenue, weak own-tax mobilisation, poor dividend recovery, and rising repayment obligations could erode fiscal space if not addressed.
One of the most significant concerns highlighted in the report is the sharp decline in revenue buoyancy. Despite robust economic growth and higher tax devolution from the Centre, overall revenue receipts grew by only 2.43 per cent to Rs 1.84 trillion. The state’s own tax revenue increased marginally to Rs 56,516 crore but failed to keep pace with GSDP growth, resulting in a steep fall in revenue buoyancy to 0.21 and own-tax buoyancy to a negligible 0.02.
Non-tax revenue also witnessed a decline of Rs 1,790 crore, largely due to poor collection of dividends and other sources, further weakening the revenue base. Although Odisha maintained fiscal discipline in terms of deficit and debt indicators, the CAG underscored the need for strengthening revenue mobilisation, improving budget credibility, ensuring timely recovery of dues, and enhancing transparency in financial reporting to sustain long-term fiscal health.
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