TaxTMI 
TaxTMI 
CAG Murthy, 16th FinCom Chairman Panagariya hold consultation on public finance
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....AG Murthy, 16th FinCom Chairman Panagariya hold consultation on public finance<BR>PTI News<BR>Dated:- 5-3-2025<BR>PTI<BR>Bhopal, Mar 5 (PTI) Comptroller and Auditor General of India (CAG) K Sanjay Murthy on Wednesday held consultations with Chairman of 16th Finance Commission Arvind Panagariya on various aspects of public finance, including untapped revenue sources, GST administration, and standar....
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....disation of accounting practices in all tiers. The high-level consultation formed a critical part of the commission's ongoing assessment of the financial landscape of the Centre and states, the CAG office said in a release. "The deliberations mainly focused on three key areas: Union and state finances, local bodies, and public sector enterprises (PSEs), among others," it said. The Union, the st....
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....ates, local bodies and the PSEs are under the audit of the CAG. In addition, the CAG also maintains the accounts of the states. The CAG shared various audit findings for the Centre and states in various sectors, the fiscal challenges and stress points, including the gap between expenditure and non-debt receipts for the Union and States combined. The key areas of concern include a decline in the ....
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....State Own Tax Revenue (SOTR) buoyancy of the states and varying levels of SOTR and Non-Tax Revenue of the States, which underscore the need for more robust revenue collection mechanisms, it said. The CAG drew attention to the need for regular reporting of the Off Budget Borrowings, meeting the FRBM targets and the taking into account post audit liabilities computed by the CAG in his reports. This....
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.... could be a crucial source of information for the Finance Commission while examining the extent of fiscal consolidation for the Union and the states, the release said. The CAG's presentation drew attention to untapped revenue sources. Notably, areas such as stamp duty, registration fees, and state excise collections have been identified as having substantial potential for enhanced fiscal performa....
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....nce. Recommendations in this regard include regular updates to market value guidelines, improved classification of property types, and the adoption of modern technology, such as sensor-based systems and QR codes, to minimise revenue leakages and improve data accuracy, it said. In the realm of Goods and Services Tax (GST) administration, the CAG has also proposed several reforms aimed at widening....
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.... the tax base and enhancing transparency. Suggested measures include the integration of unregistered goods and service providers into the GST framework via automated data collection and real-time information systems, along with improvised taxpayer verification processes. These initiatives are expected to not only streamline the tax collection process but also to ensure more accurate apportionment....
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.... of inter-state tax flows. The CAG gave a strong emphasis on the need to standardise accounting practices at all tiers of the government for transparent and ready availability of comparable fiscal information. The presentation called for the harmonisation of object heads of expenditure and adoption of a uniform 6-tier classification system by state governments without deviations. It was also hi....
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....ghlighted that, as an immediate measure, harmonisation of Local Bodies accounts with Central and State Accounts may be attempted in top 100 cities. Such steps would facilitate the seamless consolidation of fiscal data and strengthen transparency in public financial management, thereby empowering policymakers with clearer insights into both revenue and expenditure, it said. An important highlight....
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.... of the discussion was the endorsement of good practices, like that involving the establishment of a Budget Stabilization Fund by jurisdictions with surplus revenues. "This fund, designed to cushion against unexpected budgetary shortfalls or cyclical disruptions using proceeds derived from specific revenue streams such as mineral resources, is presented as a replicable model for other regions wit....
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....h similar fiscal profiles. Adoption of this measure could significantly enhance financial resilience and contribute to more stable fiscal management across jurisdictions," the release said. A key component of the meeting is centred on the financial management of local bodies. The CAG shared insights from performance audits across numerous urban local bodies and Panchayati Raj Institutions, pointi....
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....ng out issues such as incomplete devolution of functions, heavy dependence on central and state grants, and low levels of own-source revenue. The CAG's interaction with the 16th Finance Commission provided a detailed roadmap for strengthening fiscal transparency, enhancing revenue performance, and ensuring robust financial management across all levels of government, it said. PTI MAS NKD NP<BR> Ne....
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....ws - Press release - PIB....