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Bihar Under Fire Over ₹70,000 Crore Unaccounted Spending: CAG Flags Huge Fiscal Irregularities
Introduction: A Fiscal Hole Too Deep to Ignore
In a revealing audit report for FY 2023–24, the Comptroller and Auditor General (CAG) of India exposed a massive financial anomaly in Bihar—₹70,877.61 crore worth of public funds were disbursed for various schemes and departments, but no utilisation certificates (UCs) were submitted in return.
This lack of documentation means there’s no official confirmation that the money was spent correctly or at all, opening the doors wide to embezzlement, diversion, and misappropriation risks.
Utilisation Certificates: Why They Matter
Utilisation Certificates are not a mere formality—they are legal proofs that funds granted for public expenditure were used for the intended purpose and that the work was completed.
Without them:
- State and central auditors can’t verify outcomes
- Budgets for the next fiscal cycle may be compromised
- Misuse of taxpayer money becomes difficult to detect
The report states that as of March 31, 2024, Bihar had 49,649 pending UCs, some dating back to 2016–17 or earlier. This long-term backlog paints a picture of chronic financial mismanagement.
Departments with the Largest Missing Funds
Here’s a department-wise breakdown of unverified funds:
| Department | Amount Without UC (₹ crore) |
|---|---|
| Panchayati Raj | 28,154.10 |
| Education | 12,623.67 |
| Urban Development | 11,065.50 |
| Rural Development | 7,800.48 |
| Agriculture | 2,107.63 |
| Health | 1,650.00+ (estimated) |
These sectors cover critical public services—education, health, agriculture, and local governance—where fund misuse or underutilisation can have direct consequences on millions.
Spending Gaps: Budget Allocation vs. Actual Use
While the Bihar government had a budget of ₹3.26 lakh crore for 2023–24:
- It actually spent only ₹2.60 lakh crore, or 79.92%
- Savings of ₹65,512 crore were recorded
- But only ₹23,875 crore (36.4%) of those were surrendered officially
This imbalance creates a dual crisis:
- Unspent money that could have driven infrastructure, employment, and rural development.
- Unverified spending, which now risks legal action and audit queries.
Long-Term Trends: Is This New?
Unfortunately, no.
Over the last decade, Bihar has consistently failed to modernize its audit reporting systems. CAG notes similar patterns:
- Unverified expenditures of over ₹40,000 crore in 2020–21
- Audit gaps in sectors like Education, PDS (Public Distribution System), and MNREGA
- No real-time digital tracking of scheme progress
The total fiscal discrepancy across the past 10 years may now approach ₹80,000–₹90,000 crore, according to news reports.
Why This Is a National Concern
Bihar receives substantial central funds under schemes like:
- Sarva Shiksha Abhiyan (schooling)
- PMAY-G (housing)
- NHM (health)
- Mahatma Gandhi NREGA (rural jobs)
Non-submission of UCs affects:
- Future funding quotas
- Trust of central authorities
- Bihar’s credit rating and debt handling ability
The CAG has flagged a “material risk of embezzlement”—a strong term suggesting legal violations, not just procedural lapses.
Political Fallout: Assembly in Uproar
The CAG report triggered chaotic scenes in the Bihar Assembly:
- Opposition parties, including BJP and HAM(S), demanded a probe by the Vigilance Department or CBI
- Leaders asked for resignations from ministers of Panchayati Raj and Education
- CM Nitish Kumar’s government defended itself, citing “delays in clerical procedures” but promised “reconciliation by September 2025”
Public trust is fast eroding, with social media flooded by citizens questioning how funds meant for schools and roads were “lost on paper.”
Expert Voices
This is a failure not just of accounting, but of governance and delivery. It impacts the most vulnerable who depend on government schemes,” — Dr. Anurag Mehta, Economist Pending UCs dating back to 2016 show that the rot is deep. A forensic audit may be the only way to restore public faith,” — Ashwini Mishra, Public Finance Analyst
Solutions on the Table
To fix this, the following are urgently needed:
- Digitisation of UC workflows with dashboard monitoring
- Time-bound UC deadlines linked to future fund release
- Performance audits, not just financial ones
- Grievance redressal systems for local-level misuse complaints
- Department-wise ratings to reward efficiency and transparency