Himachal Pradesh — what the CAG audit found

Financial audit · State finances

This is the CAG’s annual report on the finances of the whole State. It analyses the State Government’s own accounts for the year — what came in, what was spent, the deficit, the debt and how closely spending followed the budget. It is not a compliance audit (were the rules followed in a particular department?) or a performance audit (did a scheme meet its goals?); the CAG publishes those as separate reports.

“audit observations on matters arising from examination of Finance Accounts and Appropriation Accounts respectively, of the State Government for the year ended 31 March 2024” — Himachal Pradesh report, p. 9

1. Revenue deficit

   Report p. 13

   Himachal Pradesh recorded revenue deficits in 2022-23 and 2023-24 even after receiving post-devolution revenue deficit grants; the FRBM target is revenue surplus.

   “The State had huge Revenue Deficits of ₹ 6,336 crore in 2022-23 and ₹ 5,558.59 crore during 2023-24” — CAG report

2. Fiscal deficit

   Report p. 14

   The fiscal deficit rose from 3.52 per cent of GSDP in 2019-20 to 5.43 per cent in 2023-24, against a 3.5 per cent target.

   “The Fiscal Deficit of the State increased to ₹ 11,266 crore (5.43 per cent of GSDP) in 2023-24” — CAG report

3. Debt and FRBM targets

   Report p. 15

   Debt to GSDP stood at 43.98 per cent in 2023-24 against the target of 38.98 per cent, and the report describes state finances as stressed.

   “Debt/GSDP was 43.98 per cent as against the target of 38.98 per cent.” — CAG report

4. Total outstanding liabilities

   Report p. 35

   Outstanding debt and liabilities, including Public Account liabilities, totalled Rs 95,632.96 crore at the end of March 2024.

   “At the end of the year 2023-24, the overall outstanding debt/liabilities of the State was ₹ 95,632.96 crore.” — CAG report

5. Off-budget borrowings

   Report p. 36

   The report records no off-Budget fiscal operations, such as borrowings by PSUs or SPVs on the State's behalf, affecting the State's debt in 2023-24.

   “As such, there was no impact of these on the overall outstanding debt/ liabilities of the State Government.” — CAG report

6. Guarantees

   Report p. 91

   No guarantee was invoked in 2023-24 and outstanding guarantees stood at Rs 1,744.81 crore at year end.

   “No guarantee was invoked during 2023-24. As of 31st March 2024, outstanding amount of guarantees was ₹ 1,744.81 crore as per the Finance Accounts.” — CAG report

7. Committed expenditure

   Report p. 60

   Salaries, pensions and interest took a large and rising share of revenue receipts and revenue expenditure across 2019-24.

   “committed expenditure constituted a dominant share ranging between 64 and 70 per cent of Revenue expenditure and between 62 and 79 per cent of Revenue receipts” — CAG report

8. Subsidies

   Report p. 63

   Subsidies fell to Rs 1,768.35 crore in 2023-24, with power subsidy over half of the total, and equalled about 32 per cent of the revenue deficit.

   “The total subsidies contributed 31.81 per cent to the Revenue Deficit during 2023-24.” — CAG report

9. Capital spending

   Report p. 14

   Capital expenditure was 11.16 per cent of total spending and a small fraction of borrowings in 2023-24.

   “Capital expenditure was just 37.78 per cent of the total borrowings during 2023-24.” — CAG report

10. Pending utilisation certificates

    Report p. 132

    2,990 utilisation certificates for grants worth Rs 2,795.23 crore were outstanding at March 2024.

    “A total number of 2,990 UCs amounting to ₹ 2,795.23 crore were pending as of March 2024” — CAG report

11. Unspent central scheme funds

    Report p. 17

    Funds in Single Nodal Agency accounts outside the Government account showed Rs 1,024.08 crore unspent for centrally sponsored schemes.

    “leaving a ₹ 1,024.08 crore balance unspent in the bank accounts of SNAs.” — CAG report

12. Savings and surrenders

    Report p. 113

    Budget provision of Rs 66,991 crore left savings of Rs 4,967 crore; only 35 per cent was surrendered and all surrenders were on 31 March 2024.

    “only 35 per cent of savings were surrendered. All the surrenders (₹ 1,732.93 crore) were made on 31st March 2024.” — CAG report

13. Excess over grants

    Report p. 114

    Excess expenditure of Rs 2,444.31 crore for 2021-22 and 2022-23 awaited regularisation, plus Rs 1,255.80 crore of excess in 2023-24.

    “an excess expenditure of ₹ 2,444.31 crore for the year 2021-22 and 2022-23 is still pending for regularisation” — CAG report

14. Unnecessary supplementary grants

    Report p. 16

    Supplementary provisions of Rs 711 crore in 14 cases proved unnecessary because spending did not reach original provisions.

    “supplementary provisions of ₹ 711 crore during the year 2023-24 in 14 cases (₹ one crore or more in each case) proved unnecessary” — CAG report