The Comptroller and Auditor General (CAG) has flagged concerns over the Centre’s fiscal performance and transparency under the Fiscal Responsibility and Budget Management (FRBM) Act.
Central government debt as a share of GDP jumped to 61.38% in FY2020-21, breaching the FRBM limit of 40%. It declined to 58.76% in FY2021-22 and further to 57.93% in FY2022-23, but remains above pre-pandemic levels.
In absolute terms, central government debt rose by ₹17.48 lakh crore, or 12.61%, in FY2022-23. Internal debt increased by ₹16.12 lakh crore, while external debt rose by ₹0.90 lakh crore and public account liabilities by ₹0.13 lakh crore.
The CAG said that between FY2020-21 and FY2022-23, debt accumulation was slower than GDP growth, indicating an improved capacity of the economy to service debt. However, in real terms, debt remains higher than in FY2019-20.
The audit flagged disclosure gaps, noting that the Medium Term Fiscal Policy Statement for 2024-25 did not disclose actual central government debt for FY2022-23. While the Receipt Budget 2024-25 placed total liabilities at ₹152.24 lakh crore, the CAG computed central government debt at ₹156.13 lakh crore, or 57.93% of GDP, as per the FRBM definition.
Under the FRBM Act, general government debt was to be capped at 60% of GDP by FY2024-25. The CAG said general government debt stood at 70.39% of GDP in FY2018-19 and rose to 81.35% in FY2022-23.
Interest payments remain a concern. In FY2020-21, 38.66% of revenue receipts went towards interest payments. This fell to 33.99% in FY2021-22 but rose again to 35.35% in FY2022-23.
Additional guarantees issued in FY2022-23 stood at ₹0.61 lakh crore, or 0.23% of GDP, within the FRBM limit of 0.5%.
The report also flagged inconsistencies in extra-budgetary resources. For FY2016-17 to FY2021-22, extra-budgetary resources were shown at ₹1,37,868.60 crore in the Expenditure Profile 2024-25, compared with ₹1,39,287.30 crore in the previous year, reflecting an unexplained difference of ₹1,418.70 crore.
Another concern was tax revenue raised but not realised. In FY2021-22, this stood at ₹15.83 lakh crore and rose to ₹21.30 lakh crore in FY2022-23—nearly 70% of gross tax collections. The CAG said improved recovery could have reduced borrowing.
The audit also found mismatches in key fiscal indicators for Budget Estimates 2022-23 across the Medium Term Fiscal Policy Statement, the Annual Financial Statement and the half-yearly review, without adequate disclosure.
The CAG concluded that while post-pandemic debt ratios have improved, gaps in disclosure, inconsistent data and high absolute debt levels continue to undermine fiscal transparency.
