Jaipur: With Rajasthan preparing for urban local body elections, the Comptroller and Auditor General (CAG) has flagged unutilised funds worth Rs 1,514.4 crore lying in Municipal Funds as of the end of the financial year 2024-25, raising concerns over timely spending on civic development and public services.The audit pointed out that the Municipal Fund closed 2024-25 with a balance of Rs 1,514.4 crore and noted continued retention of sizeable balances over the five-year period from 2020-21 to 2024-25.It also reported large unutilised balances in rural local bodies’ funds at the end of 2024-25, with the Zila Parishad (ZP) Fund at Rs 1,718.34 crore and Panchayat Samiti (PS) Funds at Rs 1,912.68 crore, flagging issues of fiscal management.The CAG said continued retention of such sizeable balances in local funds indicated scope for strengthening expenditure planning and ensuring timely utilisation of funds meant for developmental purposes. Since these local funds include Finance Commission grants as well as own revenues meant for decentralised governance, delays or uneven expenditure could affect delivery of local services, the audit noted.The audit further observed that while large balances remained in ZP, PS and Municipal funds, the status of unutilised funds lying in gram panchayat bank accounts was not being properly maintained at the PS or ZP level. Gram panchayats maintain their accounts in the nearest branches of scheduled banks. The panchayati raj department, however, has issued instructions for compilation of details of unutilised funds lying with gram panchayats.In its response, the local self govt department told the CAG in Nov 2025 that year-end balances were due to time taken in tendering processes, payment schedules linked to project and scheme duration, and receipt of scheme-related funds towards the end of the financial year.The CAG recommended that the state put in place a mechanism for timely utilisation of Local Funds and Municipal Funds, transfer unutilised balances of closed schemes to the revenue head, and strengthen monitoring of balances lying in gram panchayat bank accounts.Under Section 64 of the Rajasthan Panchayati Raj Act, 1994, ZPs, PSs and GPs are required to maintain ZP, PS and GP Funds, comprising money realised under the Act, grants from the Central Finance Commission and the state govt under the State Finance Commission award, besides own revenues of gram panchayats.Section 79 of the Rajasthan Municipal Act, 2009 provides for a Municipal Fund to be maintained by municipalities, with all money realised or realisable under the Act and other receipts credited to the fund.
