CAG looks for ways to 'red-flag' freebie culture

The Comptroller and Auditor General has decided to look into the issue of freebies during polls, following Prime Minister Narendra Modi's jibe into the issue.

After the issue of "financial sustainability" of states was taken up during the CAG's Audit Advisory Board (AAB) earlier this week, the department is now figuring how to devise parameters to 'red-flag' issues that may pose challenges to the economy of states, according to an Indian Express report.

According to sources stated in the report, the meeting, which CAG Girish Chandra Murmu headed, took up the issue of how most states have become "revenue-deficit" post-Covid. The audit body is also going through the repayment liabilities of such states in the next years.

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“We have seen most of the states will have a real issue — repayment. Whatever they have borrowed earlier, the repayment burden is so much that half of their budget will go, in many places, in only repaying. That is not sustainable,” a source told the publication.

Although the critical issue that the top audit body will look into are related to subsidies and other expenditures of the states, the proposed move will also shed light on off-budget borrowings, discounts and write-offs.

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“We are going very strictly from the current year… We are saying that this is not sustainable. Whatever you are doing, your financial management will go haywire. You will not be able to sustain this and the state will have a problem.”

Although audit authorities look into subsidies at present, things like remissions and relaxations do not get included in these subsidies.