PAC raps Finance Ministry over ₹9,222 crore cess transfer gap
PAC flags ₹9,222 crore cess transfer shortfall to reserve funds; Finance Ministry defends with offset claims.
The Public Accounts Committee (PAC) has expressed serious concern over the Union government's failure to transfer ₹9,222 crore of cess and levy collections into four designated reserve funds during 2024-25. The issue, flagged in the Comptroller and Auditor General's Report No. 6 of 2026, was taken up by the committee on Tuesday.
PAC chairperson K.C. Venugopal noted that the committee had already raised this matter in its 69th Report (August 2023), recommending scientific assessment of cess duration, periodic reviews, and timely crediting of proceeds to reserve funds. He said ignoring PAC directives amounts to an insult to Parliament.
Mr. Venugopal stressed that cess collections are not part of the divisible pool shared with states, making it imperative for the Centre to use them for their intended purposes. He pointed out that cess is collected from all citizens, not just income-tax payers, and should be used to renew public facilities rather than bridge budgetary gaps.
The CAG found the largest shortfall in the Pradhan Mantri Swasthya Suraksha Nidhi (PMSSN), where only ₹14,439 crore was transferred against ₹21,085 crore collected, leaving a gap of ₹6,646 crore. The Oil Industry Development Fund also saw a short transfer of ₹201 crore in 2024-25, despite cumulative cess collections of ₹3,12,782 crore since 1974-75. As of March 31, 2025, ₹2,94,150 crore remained in the Consolidated Fund of India.
The audit also noted that 10 reserve funds and 21 deposit accounts with aggregate balances of ₹844.93 crore had remained dormant for three or more years.
The Finance Ministry contested some findings, arguing that transfers to the Madhyamik and Uchchtar Shiksha Kosh (MUSK) offset the PMSSN shortfall. It said total transfers to three designated funds exceeded collections by ₹1,681 crore in 2024-25. The Ministry also said Revised Estimates for 2025-26 would address earlier gaps, and that large idle balances in reserve funds were fiscally imprudent given the government's borrowing of ₹15.74 lakh crore in 2024-25.