Comptroller and Auditor General of India (CAG) K Sanjay Murthy on Wednesday held consultations with Chairman of 16th Finance Commission Arvind Panagariya on various aspects of public finance, including untapped revenue sources, GST administration, and standardisation of accounting practices in all tiers.

       The high-level consultation formed a critical part of the commission's ongoing assessment of the financial landscape of the Centre and states, the CAG office said in a release.

       The deliberations mainly focused on three key areas - Union and state finances, local bodies, and Public Sector Enterprises (PSEs).

       The Union, the states, local bodies and the PSEs are under the audit of the CAG. In addition, the CAG maintains the accounts of the states.

       The CAG shared various audit findings for the Union and states in different sectors, fiscal challenges and stress points, including the gap between expenditure and non-debt receipts for the Union and states combined.

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       The key areas of concern include a decline in the State Own Tax Revenue (SOTR) buoyancy of the states and varying levels of SOTR and Non-Tax Revenue of the states.

       "The CAG drew attention to the need for regular reporting of the Off Budget Borrowings, meeting the FRBM targets and taking into account post audit liabilities computed by the CAG in his reports," the release said.

       The CAG's presentation drew attention to untapped revenue sources such as stamp duty, registration fees, and state excise collections.

       Recommendations in this regard include regular updates to market value guidelines, improved classification of property types, and the adoption of modern technology - such as sensor-based systems and QR codes - to minimise revenue leakages and improve data accuracy, the CAG office said.

       In the realm of Goods and Services Tax (GST) administration, the CAG proposed reforms like the integration of unregistered goods and service providers into the GST framework via automated data collection and real-time information systems.

       "These initiatives are expected to not only streamline the tax collection process but also to ensure more accurate apportionment of inter-state tax flows," the release said.

       Furthermore, the CAG emphasised the need to standardise accounting practices at all tiers of the government for transparent and ready availability of comparable fiscal information.

       The discussions also centred on the financial management of local bodies. The CAG pointed out issues such as incomplete devolution of functions, heavy dependence on Central and state grants, and low levels of own-source revenue.

       The interaction with the 16th Finance Commission provided a detailed roadmap for strengthening fiscal transparency, enhancing revenue performance, and ensuring robust financial management across all levels of government, the CAG office said.

       (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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