Liquor discharged into open yards; digital gains: Know key CAG findings on Kerala in 2024-25

Thiruvananthapuram: The latest findings from the Comptroller and Auditor General (CAG) present a starkly dual reality for Kerala. While the state continues to lead the nation in social indicators, including a high 95 per cent literacy rate and a remarkably low infant mortality rate of five per 1,000 live births, its financial and administrative machinery is facing significant friction.

The audit reports for the period ended March 2024 and the State Finances for 2024-25 (during the LDF government's tenure) reveal a government struggling to balance stellar public health outcomes with a deepening debt crisis and operational failures in key citizen services.

Road safety and transport: A high-tech stall

For the common man in Kerala, the promise of a modernised Motor Vehicles Department (MVD) remains largely unfulfilled. The CAG observed that despite the government spending ₹37.48 crore to set up nine Automated Driving Test Tracks (ADTTs) and nine Automated Testing Stations (ATSs), the project has stalled.

Only two of the test tracks became functional, leaving the rest non-operational due to contractor disputes and technical malfunctions.

This has forced the state to persist with manual testing, which lacks the transparency of automated systems. More alarmingly, the audit found that 48,059 active transport vehicles were operating with expired Certificates of Fitness (CF).

A comparison with police data revealed that 197 of these uncertified vehicles were involved in accidents, resulting in 19 fatalities.

Furthermore, even the tests conducted manually came under fire. In several RTOs, vehicles more than 22 years old or those without valid pollution certificates were being used for driving tests, setting a poor precedent for the very safety standards the department is meant to enforce.

Public health and food safety: Liquor as "food"

In a move that links excise revenue to public health, the report highlights that under the Food Safety and Standards Act, alcoholic drinks are classified as food.

However, the management of this "food" item showed serious lapses. The CAG detected a possible diversion of 12,302 cases of Indian Made Foreign Liquor (IMFL) for illicit sale in the Kerala market, representing a revenue loss of ₹5.10 crore.

The audit also flagged an environmental and public health hazard regarding the disposal of "dead stock", or unsold liquor.

In Thiruvalla and Palakkad, hundreds of thousands of cases and bottles were discharged into open yards without any effluent treatment.

This practice, conducted without proper supervision by excise officials, was labelled an environmental hazard.

On a more positive note, the Kerala Excise Department was commended for its evolution into a proactive agency addressing substance abuse.

Initiatives such as the Vimukti Mission and the Nasha Mukt Nyaya Abhiyan, which focus on rehabilitating children and community-based enforcement, were cited as "replicable good practices" for other states.

Citizen services: Cramped offices and missing amenities

For the average citizen visiting a government office, the experience remains arduous. A Joint Physical Verification of 10 selected RTO and Sub-RTO offices found them functioning in inadequate and cramped spaces.

Most lacked basic amenities such as clean restrooms, adequate waiting areas and even drinking water for the public.

At driving test grounds, the situation was equally grim. Despite applicants paying a fee of ₹960, the department failed to provide essential facilities such as shelter from the weather, forcing candidates to wait in open spaces for extended periods.

The state's digital initiatives also showed a gap between implementation and results. While the Safe Kerala Project saw AI cameras installed across the state at a cost of ₹235.82 crore, revenue collection for detected traffic violations stood at a mere 29 per cent of the total collectable amount as of late 2024.

Fiscal discipline: The shell game of public funds

Kerala's fiscal health remains a major concern, with the revenue deficit as a percentage of GSDP rising from 1.60 per cent in 2023-24 to 2.49 per cent in 2024-25.

This significantly exceeds the national average for states.

To mask these deficits, the CAG found that the government resorted to irregular "resumption" of funds.

In one instance, ₹262.06 crore in public contributions to the Chief Minister's Disaster Relief Fund (CMDRF) — intended for cancer patients and landslide victims — was withdrawn into the Consolidated Fund of the State to reduce public account liabilities.

The government also continues to rely on significant off-budget borrowings through entities such as KIIFB and KSSPL, which are not fully disclosed in the state budget.

The audit warned that such practices distort the true financial position of the state and could lead to liquidity pressures in the future.

Despite these challenges, the state was praised for its success in onboarding Centrally Sponsored Schemes to modern digital payment platforms and for its efforts to reduce tax assessment arrears in the GST department.