Why CAG Report No. 29 Risks Burying Big Governance Failures
New Parliament chamber ( Image credit Tata Group)
When “Procedure” Becomes Prime-Time- A Critical Take on CAG Report No. 29 of 2025 (Scientific & Environmental Departments Compliance Audit)
By P. SESH KUMAR
New Delhi, January 1, 2026 — CAG Report No. 29 of 2025 presents itself as a routine compliance audit for the year ending March 2023; yet its own ‘Preface’ quietly admits that it also resurrects unresolved issues from earlier years and even reaches beyond the audit period “wherever necessary.”
That single admission transforms the report into a time-mixed anthology-part contemporary review, part archival clean-up, part institutional afterthought. Or a face-saving safety valve routinely applied as a disclaimer across all compliance audit reports.
The real question, therefore, is not whether the observations are technically correct-many undoubtedly are-but whether they are proportionate, timely, and worthy of Parliament’s increasingly scarce attention at a moment when unresolved audit backlogs already threaten to overwhelm legislative scrutiny.
This critique subjects the report to a hard quantitative and conceptual stress test. When audit observations are mapped against the actual scale of departmental expenditure, the results are revealing: several findings that appear dramatic in narrative form amount to less than 0.03 per cent of annual spending.
Only one category-long-pending dues in the Department of Atomic Energy (DAE)-crosses even the half-percent threshold. Yet the report treats these vastly unequal issues with near-identical gravity, flattening the distinction between procedural lapses and systemic governance failures. In doing so, it risks substituting analytical sharpness with narrative volume.
The deeper concern is not technical accuracy but proportional judgment. By combining dated observations, minor compliance deviations, and structurally significant failures into a single undifferentiated narrative, the report blurs priorities rather than clarifying them.
The result is a document that its supporters may feel is formally impeccable yet cannot overlook that it is strategically weakened-one that risks overwhelming Parliament with noise while obscuring the signals that truly matter. In an ecosystem already burdened with thousands of unresolved audit paragraphs, such compression of scale undermines the very accountability the audit seeks to strengthen.
This review argues that the problem lies not in diligence but in discernment. When everything becomes an audit issue, nothing remains a governance priority. True accountability demands more than technical correctness; it requires judgment, proportionality, and temporal relevance. Without these, even the most rigorously prepared audit risks becoming a catalogue of compliance rather than a compass for reform.
CAG sets the macro-stage first: the eight scientific/environmental ministries/departments spent ₹72,725.54 crore in 2022–23, with Atomic Energy (DAE) alone accounting for 47.42% of that spend. It also flags a striking governance smell-large unspent provisions [Space 25.85%, DST (Science and Technology) 24.03%, DBT (Biotechnology) 17.81%, Earth Sciences 40.33%].
If the purpose is public finance accountability, these “savings” and planning failures are already a bigger story than many of the micro-paras-because they speak to absorptive capacity, project readiness, and realistic budgeting.
Now look at the “headline” monetary paras (from the report’s own contents overview): DSIR (Scientific and Industrial Research) has items like blockage of ₹1.43 crore and unproductive expenditure of ₹0.78 crore; Earth Sciences has ₹1.58 crore penalty, ₹7.28 crore non-realisation, and ₹0.73 crore avoidable payment; DST has a clean room of ₹0.66 crore lying unused for years.
In the context of a ₹72,725.54 crore spend universe, these are-let’s be blunt-mosquito bites on an elephant, unless they are framed as symptoms of systemic control failure with demonstrable replication risk.
But the same report also contains items that are not “small change,” especially in the Atomic Energy (DAE) ecosystem. One paragraph records outstanding dues of ₹152.47 crore at BRIT as of September 2024, and importantly notes that audit has been flagging this since 2006 and even earlier CAG reporting did not prevent deterioration.
Another section records losses of ₹62.03 crore due to non-compliance with statutory provisions and non-production of exemption certificates in a long window (2005–2017).
Those two are qualitatively different: they go beyond procedural nit-picking into governance failure, revenue leakage (materiality is another subject, perhaps), and weak recovery discipline. If the report had built a sharper hierarchy— “Parliament-grade issues” versus “management-letter issues”—it would have earned far more credibility.
The bigger scandal hidden in plain sight: unaccounted utilisation
If one wants a true materiality ‘bombshell’ (not an uncommon malaise across Government Departments), the report itself provides it: 41,526 utilisation certificates were outstanding as of 31 March 2023, covering grants aggregating ₹16,905.17 crore.
That is not a clerical inconvenience; it is a structural accountability gap in grant governance. CAG, however does not venture beyond totalling the value of these UCs—why and where were the bottlenecks and how the internal monitoring mechanism of these departments may have failed or faltered in discharging their fundamental vigilance.
It also reveals concentration risk: DBT alone accounts for ₹9,270 crore (54.84% of the amount), and DST for ₹4,162.61 crore (24.62%). Compared to that, a ₹0.66 crore idle facility—while embarrassing—looks like a footnote to the real story. The irony is sharp: the report contains the data for a powerful accountability narrative, but the report format (multiple small paras scattered across entities) dilutes the punch.
Delay: an audit report as a time capsule
The report does not merely suffer delay; it institutionalises it. The ‘Preface’ candidly states that it includes older matters “which came to notice in earlier years but could not be reported” previously, and even includes subsequent-period matters “wherever necessary.” In other words: the report is not strictly a “2022–23” accountability mirror-it is also a backlog-clearing vehicle. This is a common malady affecting almost all compliance audit reports.
Worse, we can see the pipeline lag: draft paras for this report were forwarded between May 2024 and February 2025. For a year ended March 2023, that is already a long runway before Parliament even sees the narrative, by which time management has either moved on, retired, transferred, or “noted” the para into oblivion.
A compliance observation, to have governance value, must be near-real-time enough to change behaviour. If the system can only speak in delayed thunder, it becomes performative-good for headlines, weak for correction.
How Prasar Bharati’s Governance Drift Silenced Accountability
Should Parliament be the first (or default) recipient of routine compliance paras?
Here the report inadvertently indicts the ecosystem: as of 31 March 2023, 1,507 Inspection Reports containing 9,050 paras were pending settlement. If the compliance pipeline itself is choked, escalating “minor, recurring” procedural infringements to a Report under Article 151 of the Constitution risks becoming a bureaucratic vanity exercise: the PAC is already overburdened, and the result is predictable-discussion delays, thin ATNs, and the audit cycle degenerating into ritual.
That leads directly to another core point: why not take many of these to the Chairmen of Atomic Energy Commission (AEC) and Space Commission as management issues? The report itself acknowledges that even where “nil comments” were issued on CPSE financial statements, management letters were still issued to 15 CPSEs. That is the right instrument for many compliance/control observations: faster, targeted, and less likely to be misread as scandal.
Media amplification risk: when procedural dust becomes a storm
Even diehard CAG apologists would agree that Parliament report is not read like an audit file-it is consumed like a verdict. When comparatively minor procedural lapses are published without a strong materiality frame, the media’s incentive is to convert them into moral theatre. The public, understandably, does not differentiate between a control weakness and a fraud; both become “CAG exposes scam.”
The reputational cost to institutions doing high-technology work inextricably linked to national security and frontier technically complex areas, can be disproportionate, and the governance gain may be marginal-especially where the report is itself delayed and the corrective window has already passed.
This is exactly why serious SAIs, in general practice, rely heavily on management letters, risk-based reporting thresholds, and thematic reporting rather than turning every compliance slip into a Parliament event.
The Indian CAG’s own reporting choices should more visibly separate: (a) fraud/embezzlement/high-loss/high-risk governance breakdowns; (b) systemic control failures with replication potential; and (c) routine procedural non-compliances best handled through executive-level closure mechanisms.
Adherence to auditing standards: the missing “why this matters” discipline
The report states that audit was conducted in conformity with CAG’s Auditing Standards. Nobody outside CAG is aware of these standards and even within CAG—many privately admit that they themselves are not fully conversant. Few within the senior management of CAG (other than who had processed the report) spend time reading reports other than which pertain to their immediate domain.
It would be naïve to admit that CAG is (unfortunately) not immune to operating in ‘Silos’ of their creation. Yet “standards compliance” is not only about correctness of observation; it is also about reporting judgment-materiality, risk, public interest, and whether reporting will improve outcomes.
Let us take the clean room case: the report narrates how a ₹0.66 crore facility remained unutilised for over five years due to lack of associated equipment procurement; it even notes that the project had been terminated in July 2022, and calls the later “extension” justification an afterthought.
Technically strong. But in a DST expenditure frame of ₹4,559.99 crore in 2022–23, the materiality is negligible unless used as a gateway to a larger systemic diagnosis: why do research institutions repeatedly fail in end-to-end project planning, procurement bundling, and time-bound execution tied to international collaborations? Without that scaling-up, the para reads like a sharp anecdote-good journalism bait, limited governance utility.
Let us contrast that with Board of Radiation and Isotope Technology (BRIT) dues: audit notes a history of warnings since 2006 and earlier reporting, yet outstanding dues balloon to ₹152.47 crore by September 2024. That is not just an error; it is a failure of corrective architecture-exactly the kind of issue Parliament should see because it tests whether audit “closure” mechanisms work at all.
So what should CAG learn from this report? Provided it is open to consider.
The report carries two competing audit personalities. One is high-value accountability: huge outstanding UCs of ₹16,905.17 crore, persistent recovery failure at BRIT, and other apparently substantive governance lapses. The other is procedural housekeeping: small-value paras that would be better used as training triggers, internal control checklists, and time-bound management closures.
If CAG wants its reports to remain “constitutional ammunition” rather than “annual compliance confetti,” it needs a sharper publishing doctrine: elevate what is materially significant or systemically dangerous; route routine irregularities through management letters and enforced settlement; and-most crucially-stop using delayed, mixed-period reporting as a substitute for timely corrective governance.
When the audit system itself sits on 9,050 pending paras, the credibility of adding more “minor” paras to Parliament is not merely questionable-it risks turning the institution’s gravest instrument into background noise.
Materiality Test: What Do the Numbers Really Say?
The table below computes materiality ratios-i.e., the size of each audit observation as a percentage of the total departmental expenditure for FY 2022–23 (as reported by CAG itself).
| Department | Audit Finding (Rs in crore) | Total Expenditure (Rs in crore) | Materiality |
| DSIR | Unproductive expenditure 0.78 | 6,755.68
|
0.011%
|
| DSIR | Blockage of funds 1.43 | 6755.68 | 0.021%
|
| DST | Idle clean room facility 0.66 | 4,559.99
|
0.014%
|
| MoES | Avoidable expenditure 0.73 | 2,868.31
|
0.025%
|
| MoES | Non-realisation of revenue
7.28 |
2,868.31
|
0.254%
|
| DAE | Non-recovery of dues (BRIT)
152.47 |
34,475.10
|
0.44%
|
What this table reveals-uncomfortably clearly
The overwhelming majority of “irregularities” highlighted in the report fall well below even 0.05% of departmental expenditure. In auditing terms, these are trivial by any reasonable materiality threshold, particularly in science-heavy ministries where project uncertainty, procurement sequencing, and long gestation cycles are inherent.
Only one item—₹152.47 crore of unrecovered dues in the Department of Atomic Energy (DAE)—crosses even 0.4% of departmental spending. That is the only issue in the report that genuinely qualifies as a Parliament-level concern.
Everything else belongs to what auditors traditionally classify as “Operational deviations best addressed through management communication, not constitutional reporting.”
The real problem is not error-it is miscalibration. The report treats a ₹0.66 crore idle clean room, and a ₹152 crore long-pending recovery as peers in moral weight and reporting prominence. This is not neutrality; it is false equivalence.
When every pebble is given the weight of a boulder, Parliament would lose its sense of scale, urgency, and prioritisation. The danger is not misinformation-it is misdirected attention.
Delay compounds distortion
The Preface itself admits that observations relate not only to 2022–23 but also to earlier years “wherever necessary.” When such time-lagged, low-value issues are presented in a constitutional report. Corrective governance becomes impossible, public discourse becomes reactive rather than analytical and accountability turns symbolic instead of functional.
Why Parliament should not be burdened with this class of issues
The Public Accounts Committee is already drowning under: 9,050 pending paras, and 1,507 unresolved Inspection Reports.
To expect Parliament to adjudicate whether a ₹0.78 crore expenditure was “unproductive” inside a ₹6,700+ crore ecosystem is to convert oversight into noise management.
Such issues belong in structured Management Letters, time-bound executive compliance dashboards, or internal audit escalation matrices, not in reports that shape national narrative and public trust. International audit practice would not support this approach.
Comparable Supreme Audit Institutions (NAO–UK, GAO–USA, ANAO–Australia) use strict materiality filters. Minor compliance lapses are aggregated, contextualised, or handled administratively. They are not elevated to parliamentary artefacts unless they signal systemic governance failure.
What this does to CAG’s institutional authority
When minor procedural deviations are placed on the same pedestal as major financial governance failures, two things happen. Serious findings lose moral force, drowned in procedural clutter and public trust erodes, as citizens struggle to distinguish governance failure from administrative trivia. Ironically, this weakens the very accountability that CAG exists to protect.
Lessons for the CAG (and the system)
CAG does not suffer from lack of diligence-it suffers from overexposure of low-impact detail. The way forward lies in:
- Enforcing materiality thresholds aligned with international audit standards and making these public in its reports explicitly.
- Reserving Parliamentary reporting for systemic, high-impact failures
- Using management letters for routine compliance lapses
- Reporting timely, not historically accumulated, deficiencies
- Presenting risk-weighted narratives, not inventory-style listings
Closing Thought
A constitutional audit report should behave like a searchlight, not a floodlight.
When everything is illuminated equally, nothing truly stands out.
CAG Report No. 29 of 2025 contains important insights-but they are buried under the weight of their own over-reporting. The danger is not that Parliament will miss the message; it is that it will stop listening altogether. CAG’s audit cannot afford to lose its sense of scale in reporting to Parliament.
(This is an opinion piece. Views expressed are author’s own)
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