The Comptroller and Auditor General of India has once again exposed the ugly underbelly of how the Central Government handles public money. In its latest report on the Central Government Accounts for 2024-25, the CAG has flagged a jaw-dropping Rs 54,282.32 crore in unaccounted spending. This isn’t a rounding error or a minor oversight. This is fifty-four thousand crore rupees of taxpayers’ money released to ministries and departments without proper proof of how it was actually spent.
As of March 31, 2025, 33,973 utilisation certificates worth Rs 54,282 crore were lying pending across just 15 ministries and departments. These certificates are not optional paperwork. They are the basic mechanism to ensure that grants-in-aid given by the Centre have been used for the intended purpose — building roads, running schools, funding hospitals, or supporting welfare schemes. Without them, the entire chain of accountability collapses.
Worse still, Rs 38,287.52 crore of this amount relates to just the last three financial years (2021-22 to 2023-24). Some utilisation certificates are shockingly old — dating all the way back to 1985-86. That’s nearly forty years of pending paperwork. Rule 238 of the General Financial Rules 2017 is unambiguous: utilisation certificates must be submitted within 12 months of the release of funds. But clearly, rules are only for ordinary citizens and small businesses. For Union ministries, deadlines are mere suggestions.
The Ministry of Housing and Urban Affairs takes the crown for the biggest offender, with Rs 18,272.91 crore in pending utilisation certificates. This is the same ministry that repeatedly boasts about PMAY housing schemes, Smart Cities, and urban development for the poor. Next comes the Department of Higher Education with Rs 14,359.76 crore still unaccounted for. Education — the sector politicians love to lecture us about as “investing in India’s future” — cannot even produce basic documents to show where the money went. If this is the level of seriousness shown toward funds meant for colleges, universities, and student scholarships, then one can only imagine the ground reality.
This is not mere administrative delay. This is systemic financial indiscipline bordering on arrogance. The CAG report doesn’t stop at pending utilisation certificates of the Central Government. It also exposes massive misclassification of expenditure amounting to Rs 12,754.47 crore. Out of this, Rs 8,742.56 crore was booked under completely wrong accounting heads. In one particularly brazen case, the Department of Atomic Energy — which handles critical and strategic projects — incorrectly classified Rs 3,089.97 crore of revenue expenditure as capital expenditure. This kind of jugglery doesn’t just violate accounting norms; it deliberately distorts the government’s true revenue and capital spending picture.
Irregularities were also found in Central Government receipts worth Rs 4,011.91 crore. Non-tax revenues were wrongly shown as tax revenues by the CBDT and CBIC. When the very agencies responsible for collecting taxes start playing creative accounting games, how can anyone trust the fiscal deficit numbers, revenue figures, or the overall health of government finances presented to Parliament and the public?
Then there is the Central Government’s favourite accounting dustbin — the notorious ‘Minor Head 800’. The CAG has once again criticised the continued misuse of this omnibus head. In several major heads, more than 50 per cent of all transactions are still being dumped under Minor Head 800. This practice kills transparency and makes proper auditing almost impossible. When you cannot even tell what the money was spent on, how do you hold anyone responsible? Yet year after year, ministries continue this lazy and opaque habit as if it’s perfectly normal.
Equally disturbing is the revelation that Rs 9,222 crore collected through various cesses and levies was not fully transferred to the designated reserve funds. Money specifically meant for primary education under the Prarambhik Shiksha Kosh and for health infrastructure under the Pradhan Mantri Swasthya Suraksha Nidhi is apparently parked elsewhere, doing God knows what. These are purpose-specific collections. Diverting or delaying their transfer is not just poor governance — it is a breach of trust with citizens who pay these cesses expecting them to be used for stated objectives.
The auditor also flagged 56 instances of adverse balances, including a staggering Rs 44,714.77 crore under the Ministry of External Affairs caused by a single incorrect transfer entry. A cash balance of Rs 3,880.67 crore remains unreconciled with the Reserve Bank of India. Liabilities have been understated by cleverly netting them off in suspense heads. These are not small technical mistakes. They point to deep, structural weaknesses in the government’s accounting and financial control systems.
Despite repeated CAG warnings, the Public Financial Management System (PFMS) — which was supposed to bring real-time tracking and transparency — has clearly failed to deliver the kind of discipline that was promised. The CAG has rightly called for stricter adherence to accounting norms, stronger internal controls, and a far more robust digital tracking mechanism.
But let’s be honest. We have heard these recommendations before. Every year the CAG tables similar reports highlighting pending utilisation certificates, misclassifications, unreconciled balances, and misuse of suspense heads. Every year, ministries promise to “take necessary action,” form review committees, and issue fresh guidelines. And every year, the next CAG report looks depressingly similar.
This recurring pattern exposes a dangerous culture in India’s higher bureaucracy and political executive: a casual, almost contemptuous attitude toward public money and accountability. When ministries can sit on utilisation certificates worth thousands of crores for years without facing any real consequences, it sends a clear message — rules are for ordinary people, not for those who control the levers of power in Delhi.
The common taxpayer, especially the salaried middle class that bears the brunt of direct taxation, has every right to be furious. While citizens are penalised heavily for even minor delays in filing returns or paying taxes, Union ministries treat massive public funds with shocking negligence.
Fifty-four thousand crore rupees is not a small amount. It could have funded thousands of schools, built critical healthcare infrastructure, or supported countless welfare schemes that actually reach citizens. Instead, it remains unaccounted for, hidden behind pending certificates, wrong heads, and creative classifications.
The Central Government cannot keep dismissing these findings as routine audit observations. This scale of financial sloppiness undermines public trust and damages the credibility of India’s fiscal management in the eyes of markets, investors, and ordinary citizens.
It is high time the executive treats CAG reports with the seriousness they deserve. Real accountability must be enforced. Erring ministries and officers should face consequences — not just polite reminders. The Public Financial Management System needs genuine overhaul, not cosmetic upgrades. Digital tracking must become non-negotiable, and utilisation certificates must be submitted on time, every time.
Until then, CAG reports will continue to be annual exercises in exposing the same old rot, while ministries keep proving one uncomfortable truth: rules are indeed for ordinary people. The powerful can afford to ignore them.
Naorem Mohen is the Editor of Signpost News. Explore his views and opinion on X: @laimacha.