CAG Flays Panjab’s Fiscal Management, Administration Lapses

March

2026

As the Aam Aadmi Party government in Panjab completed its fourth year, a report of the Panjab Comptroller and Auditor General (CAG) warned of 'heavily stressed state finances' with debts and liabilities accounting for 44.27% of the Gross State Domestic Product (GSDP). The CAG report for the state’s finances for 2023–24 has put the total debt and liability figure at USD 37B. The budget presented on 8 Mar had estimated debt to touch USD 48B in 2026–27. The report says in rural areas 18,123 acres of village commons land are under unauthorized occupation, while 17 community welfare projects worth USD 99K sit either abandoned or unfinished. Six completed assets worth USD 832K were never utilized. Key failures identified include infrastructure waste, revenue leakage, and fiscal malpractice. Urban bodies failed to collect more than USD 13.5M in waste management charges. Auditors flagged more than USD 480K in unauthorized construction works and more than USD 220K in illegal advance payments to contractors. The audit found that 1,114 habitations were still receiving contaminated water as of April 2023 with piped water being supplied from unsafe sources. The report has exposed a near-total collapse of Panjab's emergency response infrastructure, revealing that the state's Dial 112 system is operating with an 86% shortage of required vehicles. CAG has pointed out deficiencies in the functioning of Regional Transport Offices, highlighting gaps in digital systems, delays in service delivery, and short realization of Motor Vehicle Tax. The audit highlighted weaknesses in VAHAN and SARATHI (transport related IT applications) noting that the absence of validation checks in business rules allowed violations of motor vehicle regulations to go unchecked. The audit also flagged non-compliance by vehicle owners, including failure to obtain permanent registration after expiry of temporary registration, non-renewal of fitness certificates for transport vehicles, non-application for permits in newly registered transport vehicles, and non-renewal of permits. Additionally, Panjab has ranked last among India’s 18 major states in the second edition of the Fiscal Health Index. Panjab scored 12.4 out of 100, the lowest for any major state (earlier coverage).