The total budget of Bihar government was Rs 2.45 lakh crore in 2020-21, which increased to Rs 3.64 lakh crore in 2024-25. But every year a large part of the budget could not be spent. In 2024-25, the government made a budget of Rs 3.64 lakh crore, while the expenditure was only Rs 2.87 lakh crore. That means Rs 77,340 crore (21.22%) was left without spending. CAG says that this shows that the government made more budget than necessary and did not assess the budget properly.
The report shows that not only is the government struggling to spend the money received, but the system is also proving to be a complete failure in giving accounts of the money that has been spent. The situation is that the Bihar government has failed to submit 62,632 Utilization Certificates (UCs) related to the expenditure of Rs 92,132.75 crore by March 2025. Let’s understand the whole story
What is Utilization Certificate (UC)
In government work, when money is given to any department for development work, after the completion of the work, it has to submit ‘Utilization Certificate’. This is proof that the money has been spent on the work for which it was allocated. According to the CAG report, out of the total pending amount of Rs 92,132.75 crore, the account of Rs 78,811.86 crore (about 85.5%) is stuck with only 5 big departments.
Big budget, but low spending capacity
On one hand, the accounts of the money spent are not being found, on the other hand, the government is not able to spend its own budget.
If we look at the figures, the total budget of Bihar government in the financial year 2020-21 was Rs 2.45 lakh crore, which increased to Rs 3.64 lakh crore in 2024-25. But every year a large part of the budget remains unused.
- Status of 2024-25: The government had made a total budget provision of Rs 3,64,518.87 crore, but the actual expenditure could be only Rs 2,87,178.49 crore.
- How much left: Overall, Rs 77,340.38 crore (21.22% of the budget) remained unspent.
The biggest and surprising thing is that out of this huge savings of Rs 77,340 crore, Rs 66,952 crore (86.57% of the total savings) was not even surrendered (returned) by the government before the end of the financial year. Government treasury rules say that if the money is not being spent, it should be returned on time so that it can be allocated to some other necessary item.
Debt increased, but dependence on the center remained
There are two most important parameters of the financial health of the state – fiscal deficit and the state’s own earnings. The situation in Bihar is worrying on both the fronts.
- Fiscal deficit beyond limits: Bihar’s fiscal deficit has reached Rs 41,222.50 crore in the financial year 2024-25, which is 4.16% of the state’s gross domestic product (GSDP). Whereas under the FRBM Act, the target was set to keep it within the limit of 3.50%.
- Heavy dependence on the centre: Bihar is still largely dependent on the central government for its earnings. Of the total revenue receipts of the state, 59.20% is from taxes received from the Center alone. At the same time, its own earnings are only 24.50% of the total revenue receipts. This shows that the state is still far from achieving its financial independence.
Apart from UC, another way to withdraw government money is through advance/contingency bills, against which detailed bills have to be submitted later. As of March 31, 2025, 19,487 AC bills amounting to a whopping Rs 10,361.74 crore are pending. Of these, Rs 5,513.69 crore was withdrawn only for capital expenditure. Pending of these bills directly increases the risk of loss to the government treasury and embezzlement of funds.
Despite being in a better condition in the last few years, Bihar has recorded a revenue deficit of Rs 357.38 crore in the financial year 2024-25. The main reason for this is the huge increase of 19.84% in salary, pension and interest.
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