CAG and Finance Commission's Strategy for Fiscal Transparency and Resilience

The Comptroller and Auditor General of India, K Sanjay Murthy, met with the 16th Finance Commission in Bhopal for high-level consultations. Discussions highlighted fiscal health, revenue mechanisms, and enhanced transparency. Key topics included Union and State finances, local bodies, public sector enterprises, untapped revenue, GST reforms, and financial management practices.

In a significant meeting held in Bhopal, the Comptroller and Auditor General of India, K Sanjay Murthy, engaged in discussions with the 16th Finance Commission, led by Chairperson Arvind Panagariya. The consultation forms part of the Commission's broader evaluation of India's fiscal framework involving both the central and state finances.

Key discussion points included Union and State Finances and Public Sector Enterprises, emphasizing the need for new revenue collection mechanisms as state taxation revenue declines. The CAG highlighted necessary reforms, such as regular reporting of off-budget borrowings, market value updates, and modernization in taxation practices to prevent revenue loss.

Additionally, the CAG pushed for GST reform, proposing automated systems to integrate unregistered providers, thereby expanding the tax base and promoting transparency. A unified accounting practice across government levels, establishment of Budget Stabilization Funds, and improved local body financial management were endorsed to enhance financial resilience and governance.

(With inputs from agencies.)