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Disaccord spotted over fund diversion amidst FinMin and CAG

By Priti Kumari



The counterstatement of Finance Ministry on CAG's audit report over fund diversion firmly claims that the short crediting of GST compensation in CFI (Consolidated Fund of India) cannot be dubbed as "diversion ". The ministry affirmed that "the proceeds of cess collected and not transferred to designated accounts (public) would be transferred in subsequent years".

The assertion transpired by the Ministry at the time when CAG slammed the union government with erroneous retainment of Rs 47,272 crore of GST compensation in CFI in 2017-18 and 2018 -19 and used it for other government expenditures ushered to the overstatement of revenue receipts and understatement of fiscal deficit for the year. According to the CAG report tabled on the concluding day of this year's monsoon session of parliament, "the short crediting was a violation of the GST compensation cess Act, 2017.

The GST compensation cess Act, 2017 refers to the total cess garnered over a year is required to be credited to the public fund. In its way of detailing government's audit, CAG alleges that in the FY2018 -19 department of revenue hitherto transferred Rs 54,275 crore to the designated fund instead of 95,081 crores which were collected as the GST compensation during the same year. Other than the GST cess, the Road and Infrastructure cess, cess on crude oil, Universal service levy and National Mineral Trust levy were not transferred to their respective funds, CAG reported.

This bizarre circumstance demands transparency in India's federal structure. It's high time now to shift the government's "transparency "agenda from papers to superficies, to eradicate distrust in the governance.


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