Context

• The "State Finances Report 2024-25", released by Comptroller and Auditor General (CAG) Sanjay Murthy, presents an analysis of the revenue and fiscal position of Indian states.

Key Findings :

Revenue Surplus and Revenue Deficit

• In 2024-25, 13 states recorded a revenue surplus, while 15 states reported a revenue deficit.
• Eighteen states targeted a revenue surplus, three targeted a revenue deficit, and seven targeted a zero revenue deficit.
• Only 9 of the 18 states that targeted a revenue surplus were able to achieve it.
• Assam, Bihar, Chhattisgarh, Haryana, Himachal Pradesh, Karnataka, Maharashtra, Mizoram, and Telangana ended the year with a revenue deficit despite targeting a surplus.

States Targeting Zero Revenue Deficit :

• Goa, Jharkhand, Punjab, Rajasthan, Tamil Nadu, Tripura, and Uttar Pradesh targeted a zero revenue deficit.
• Among them, Goa, Jharkhand, Tripura, and Uttar Pradesh achieved a revenue surplus.
• Punjab, Rajasthan, and Tamil Nadu ended the year with a revenue deficit.

Revenue Deficit Grants :

• Himachal Pradesh, Mizoram, Punjab, and West Bengal received Revenue Deficit Grants from the Finance Commission.

Fiscal Deficit :

• Eighteen states exceeded the indicative fiscal deficit target of 3% of GSDP prescribed by the Fifteenth Finance Commission for 2024-25.
• All 28 states recorded a fiscal deficit during 2024-25.
• Andhra Pradesh, Assam, Gujarat, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Meghalaya, Mizoram, Nagaland, Odisha, Tripura, and Uttarakhand witnessed a significant rise in fiscal deficit compared to 2023-24.

Revenue Deficit Position :

• The combined revenue deficit of the 15 deficit states stood at ₹3,46,385 crore, equivalent to 1.5% of their combined GSDP.
• After adjusting the revenue surplus of 13 states, the net revenue deficit stood at ₹2,19,041 crore, equivalent to 0.68% of the combined GSDP of all 28 states.

States’ Tax Revenue :

• The total revenue of states in 2024-25 stood at ₹40.52 lakh crore.
• • States' own tax revenue contributed nearly 50% of the total revenue.
• • State GST (SGST) accounted for more than 43% of the combined tax revenue of all states.

Comptroller and Auditor General (CAG) of India :

Constitutional Status:

• The CAG is an independent constitutional authority established under Article 148 of the Indian Constitution.
• He is known as the "Guardian of the Public Purse" of India.

Constitutional Provisions (Part V – Chapter V) :

• Article 148: Provides for an independent office of the CAG, including appointment, oath, and service conditions.
• Article 149: Empowers Parliament to prescribe the duties and powers of the CAG regarding the accounts of the Union, States, and other authorities.
• Article 150: The form of Union and State accounts is prescribed by the President on the advice of the CAG.
• Article 151: The CAG submits audit reports relating to Union accounts to the President and those relating to State accounts to the respective Governors.

Appointment, Tenure and Removal :

• Appointment: The CAG is appointed by the President of India through a warrant under his hand and seal.
• Tenure: The CAG holds office for 6 years or until attaining the age of 65 years, whichever is earlier.
• Removal: The CAG can be removed by the President only in the same manner and on the same grounds as a Judge of the Supreme Court, i.e., through a special majority resolution passed by both Houses of Parliament.