Why Assam’s Fiscal Mirror Has Cracked And What Holds for India
Assam CM Himanta Biswa Sarma with Governor Laxman Acharya (Image Assam CM)
A critical examination of the latest Comptroller and Auditor General of India report raises tough questions about government accountability, the effectiveness of the Public Accounts Committee of Assam, and the national culture of budgetary indiscipline.
By P. SESH KUMAR
New Delhi, December 1, 2025 — The CAG’s latest report on the Assam government’s 2023–24 finances reads less like a routine audit and more like a blunt diagnostic note on a system drifting away from discipline. For a state once celebrated for stabilizing its finances after years of insurgency and flood-driven uncertainties, the findings are unusually sharp: inflated receipts, bloated grants, chronically unrealistic assumptions, and a mountain of unsubmitted Utilisation Certificates (UC) dating back nearly two decades.
What is new is not the existence of fiscal slippages—every state has them in varying shades—but the scale at which Assam appears to have normalised them.
Unrealistic Budgets and a State Looking Away: Assam Rings Alarm
The CAG’s latest audit on Assam’s 2023–24 finances landed with the quiet thud of a report that tells an uncomfortable truth: the state’s budget has drifted far from reality. This wasn’t the routine auditese of “variances,” “shortfalls,” and “savings”-but an unusually direct indictment.
The CAG termed Assam’s budget “unrealistic and overestimated,” a phrase auditors usually reserve for repeat offenders where fiscal misalignment borders on systemic neglect. What stood out in this report is not merely the size of the gaps but the pattern they represent: a budget built on assumptions detached from receipts, expenditure artificially inflated through supplementary demands, and a financial reporting architecture that is collapsing under its own arrears.
Assam estimated receipts that never arrived and approved expenditure that never fructified. Over ₹1,69,966 crore was granted, but actual spending was only about ₹1,39,450 crore-leaving more than ₹30,500 crore in notional savings.
In a well-managed system, such deviations would trigger reallocation or rationalisation. Instead, Assam surrendered only about ₹107 crore-barely a symbolic gesture amounting to 0.35% of total savings. The rest simply sat there, unutilised, unexamined, and unaccounted for in terms of opportunity cost.
To those who follow public finance, the message was unmistakable: the budget was not a tool for disciplined governance but a display document.
The CAG’s criticism of Assam’s supplementary budgetary practices was equally revealing. Supplementary demands of more than ₹30,210 crore were placed before the Assembly, but audit analysis showed that only 74% was actually needed.
Why departments continue to seek more than they can spend is a question every PAC chairman has asked for decades. But here the disproportion was too large to ignore. It reflected both weak internal controls and a political habit of presenting ‘expansionist’ budgets to project developmental momentum, even if the machinery cannot absorb funds at that speed.
The most damning portion of the report, however, concerned accountability. Over 6,335 Utilisation Certificates involving ₹18,600 crore-some dating back to 2005-remain pending. This backlog is not a clerical delay; it is a collapse of fiduciary discipline.
Without UCs, neither the Legislature nor the CAG nor citizens can say whether thousands of crores released over years were used for roads, schools, hospitals-or used at all. Compounding this is the pile-up of arrears: 75 autonomous bodies and 39 PSUs have not submitted annual accounts for years, in some cases for more than a decade. At that scale, fiscal opacity becomes not an exception but a way of life.
The Assam government’s defence, expectedly, hinges on the familiar triad: optimistic revenue forecasting, implementation bottlenecks, and procedural delays. If challenged, the Finance Department would likely argue that states have been encouraged by the Union Government and NITI Aayog to adopt growth-oriented projections, that floods and law-and-order constraints disrupt expenditure flow, and that many UCs relate to centrally sponsored schemes where implementing agencies-often outside direct State control-delay submissions.
These arguments have some truth to them, but none explain why Assam continues to present receipts that repeatedly fall short or why old UCs from 2005–06 remain unsubmitted long after projects should have been completed or closed.
Comparatively, Assam is not alone in such irregularities. Karnataka, Uttar Pradesh, Bihar, Rajasthan, and even high-performing states like Maharashtra and Tamil Nadu have had CAG reports flagging massive pending UCs, bloated supplementary budgets, and unrealistic revenue assumptions.
CAG’s Big Reset: AI Audits, Scrutiny and a Push for Accountability
But what differentiates Assam’s case is the persistence and scale of the lapses in a state that had earlier made visible progress in tightening public expenditure management. The backward slide is what makes this report significant.
For the CAG, this report also carries lessons. First, the persistence of UCs and pending accounts across states begs the question whether traditional audit recommendations-even when harsh-create behavioural change. Year after year, the same observations appear in dozens of state reports with minimal course correction.
This suggests that the audit cycle needs complementary enforcement-possibly through legislative penalties, conditional release of funds, or real-time dashboards that make delays public.
Second, the CAG’s critique of supplementary grants is well-founded, but without systemic reforms to file processing, liquidity forecasting, and line department accountability, states will continue using supplementary budgets as political theatre rather than management tools.
On timeliness, the report is reasonably prompt in the Indian context, where some states’ audit reports are tabled with a lag of two to three years. Yet timeliness alone does not ensure impact.
The real question is whether the Assam PAC will pick up this report with seriousness. Historically, Assam’s PAC record has been uneven. While certain periods saw active scrutiny and summoning of errant departments, the last decade has witnessed declining meeting frequency, delayed ATNs, and long gaps between examination and recommendation.
Without an empowered PAC willing to insist on compliance, the sharpest CAG report will end up as yet another document on the Legislature’s shelf.
The CAG recommendations—for realistic budgeting, reliable projections, early surrender of savings, and clearance of UCs—are unquestionably sound. But they confront a deeply embedded administrative reality: departments continue to over-budget to protect turf, underutilize funds due to weak capacity, and postpone accountability because there are no penalties.
The recommendations are practical only if the political and bureaucratic leadership enforces them with incentives and disincentives. Otherwise, Assam’s 2023–24 audit will join the long line of reports that are praised for their honesty but ignored for their implications.
If there is one message that emerges from the CAG’s narrative, it is this: budgets do not fail in spreadsheets, they fail in systems. Assam’s financial system-from forecasting to execution to reporting-needs foundational repair. And unless the government, Legislature, and audit collectively commit to that repair, the next CAG report will simply repeat what this one has already shouted.
Prescription for Course Corrections
Assam’s fiscal correction requires three simultaneous shifts. First, forecasting must be recoupled with administrative capacity. Expenditure ceilings that departments cannot absorb must be trimmed, and cash forecasting must be realistic rather than aspirational.
Second, the mountain of pending Utilisation Certificates and arrears of accounts must be cleared through a time-bound, legislatively monitored campaign, with automatic fund freezes for repeatedly non-compliant entities.
Third, the PAC must reclaim its authority-meeting frequently, issuing binding recommendations, and ensuring time-bound Action Taken Notes. For the CAG, this report should trigger more real-time audit interventions rather than annual post-mortems. Assam is not the only state with these problems-but it has now become a state where the warning signs are too loud to ignore.
(This is an opinion piece, and views expressed are those of the author only)
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