Centre has not transferred 3.69 lakh crore of cess collections to the designated funds, CAG finds

As of 2023-24, the Central Government has did not switch ₹3.69 lakh crore value of cess collections to the related funds for which the cess was applied, the Comptroller and Auditor General has discovered. A cess is a levy over and above a tax and needs to be used for a selected goal. 

These brief allocations date again to cesses imposed in 1974 and thus present lapses throughout governments. 

In its report on the accounts of the Union Government for 2023-24 tabled in Parliament on Tuesday (August 12, 2025), the CAG discovered such shortfalls in transfers regarding funds created for investor training and safety, monetisation of nationwide highways, growth of the oil trade, and the event of well being and training within the nation.

“The combination influence of take a look at checked funds until 31 March 2024 was brief switch of ₹3,69,307 crore to the designated reserve fund within the Public Accounts,” the CAG mentioned in its report.

The single-largest supply of this shortfall in transfers was to do with the Oil Industry Development Board (OIDB). The Oil Industry (Development) Act, 1974 had supplied for the establishing of the OIDB for the event of the oil trade. For that goal, a cess was imposed on crude oil and pure gasoline. 

“We discovered that as per the Annual Report 2023-24 of OIDB, since FY 1974-75 to FY 2023-24, complete cess on crude oil collected by the Government was ₹2,94,850.56 crore (together with ₹18,845.98 crore throughout FY 2023-24),” the CAG report famous. “It can be important that since FY 1974-75 to FY 1991-92, solely ₹902.40 crore has been transferred to the OIDB and thereafter no funds have been transferred to the OIDB, out of the cess collected annually.”

In different phrases, the federal government collected ₹2.9 lakh crore as cess for the event of the oil trade since 1974-75, however had transferred solely ₹902 crore or 0.3% to the related fund as of 2023-24.

In its reply to the CAG, the Ministry of Finance mentioned that the federal government had determined to represent an ‘Oil Industry Development Fund’ for the event of the oil sector, which was operationalised from 2024-25. 

An evaluation by The Hindu of the federal government’s finances paperwork exhibits it has transferred ₹17,730 crore in 2024-25 and has budgeted a switch of ₹19,376 crore in 2025-26 to the fund. 

The different massive cess that has been collected, however not adequately transferred to the related fund is the Health and Education Cess. 

The Government had imposed an Education Cess at 2% on all taxes collected by the Centre with impact from April 1, 2004. The authorities in 2007 levied an extra Secondary and Higher Education cess of 1% on earnings tax and surcharge. From April 1, 2018, the central authorities changed these two cesses with a single 4% Health and Education Cess. 

The proceeds from these cesses had been to be transferred to the Prarambhik Shiksha Kosh (PSK) launched in November 2005, the Madhyamik and Uchchatar Shiksha Kosh (MUSK) established in 2017, and the Pradhan Mantri Swasthya Suraksha Nidhi (PMSSN), arrange in 2021. 

The evaluation by the CAG discovered that the Centre didn’t switch a complete of ₹37,537 crore that it collected as cess from 2018-19 to 2023-24 to the related training and well being funds.

There does appear to be a discrepancy right here, the CAG acknowledged. In its reply, the Finance Ministry mentioned that between 2018-19 and 2023-24, it transferred ₹3.66 lakh crore to the designated funds, which was in extra of what it had collected from the related cesses throughout that point. 

However, the CAG identified that the Union Government Finance Accounts confirmed that the switch to those funds throughout this era was ₹2.65 lakh crore. 

“This must be reconciled by the Ministry,” it added.

The different funds the place the switch was lower than the cess collected had been the Investor Education and Protection Fund (₹2,505.5 crore shortfall) and the Monetisation of National Highways Fund (₹5,968.1 crore shortfall).