New Indian Express: National: Sunday, 12th
October 2025.
Now, Gujarat’s urban governance is staring at a financial storm.
A massive accountability
crisis has exploded in Gujarat as eight major Municipal Corporations have not
been audited for several years, leaving a budget worth over Rs 2 lakh crore
unaudited and unverified.
The revelations, made through an RTI response, expose systemic neglect, violation of audit laws, and a stunning breakdown of financial transparency.
Citizens of these cities have effectively been left in the dark about how public money is being spent. Now, Gujarat’s urban governance is staring at a financial storm.
RTI documents have exposed that not a single audit has been completed for several years for eight major Municipal Corporations: Ahmedabad, Gandhinagar, Rajkot, Jamnagar, Bhavnagar, Junagadh, Surat and Vadodara.
The data, obtained from the Director of the Local Fund Accounts Office in response to an RTI filed under Section 4(1) of the Act, reveals how thousands of crores of rupees in civic funds have remained unaudited, violating the Gujarat Local Fund Audit Act, 1963.
The backlog means that over Rs 2 lakh crore of municipal expenditure across Gujarat’s largest cities has never undergone mandatory financial scrutiny.
With an annual budget of around ₹12,000 crore in 2024–25, the Ahmedabad civic body hasn’t completed an audit since 2017–18, which roughly translates to approximately ₹50,000 crore in unverified accounts for just one city.
Similar patterns are seen in Surat and Vadodara, while other corporations have remained unaudited for four to six years. Experts say that this is not a mere technical lapse, but a deep governance failure.
Ignored directives, defied laws
This financial vacuum exists despite clear legal obligations and repeated directives. Notably, the Gujarat Local Fund Audit Act, 1963, under Section 4 mandates annual audits of all local bodies.
The 11th Central Finance Commission (2000–05) had recommended that the audit of Municipal Corporations be done under the guidance of the Comptroller and Auditor General (CAG), with reports submitted to the State Assembly.
A Finance Department resolution on May 6, 2005, and later a circular on December 23, 2011, made this legally binding. The CAG had also flagged the non-compliance in August 2009, urging Gujarat to ensure timely audits.
In 2011, Section 108A was added to the Gujarat Provincial Municipal Corporations Act, 1949, to reinforce the obligation. Yet, the RTI reply confirms that none of these directives have been implemented effectively.
The failure has also meant
that no audit reports have been tabled in the Gujarat Legislative Assembly for
years, as the audits were never done. The Finance Department’s 2011 circular
was meant to bring in accountability through CAG-supervised audits of Municipal
Corporations.
These reports were to be presented before the Assembly, debated, and acted upon. Instead, the process has been derailed for over a decade.
Neither the CAG nor the Local Fund Audit Office has enforced strict timelines, and successive governments have allowed this crisis to deepen.
RTI applicant raised red flag
RTI Activist and Professor Hemant Kumar Shah has slammed the government, alleging a deliberate shielding of irregularities. “In a democracy, the audit report for the previous financial year should be presented in the new year, debated by corporators, and acted upon as per rules. If the audit itself is not done for years, transparency collapses, and irregularities get buried,” Shah claimed.
He further alleged, “This is a clear violation of the Gujarat Local Fund Audit Act, 1963. The State Assembly has failed in its duty to ensure annual presentation of audit reports. Transparency is a fundamental principle of democracy. When ₹2 lakh crore goes unaudited, the public’s right to know how their money is used is crushed.”
Citizens kept in the dark
The lack of audits not just weaken financial scrutiny but also denies Gujarat’s urban citizens of transparency over how civic budgets are spent on critical services like roads, water, housing, and sanitation.Over two crore people live in these eight municipal areas.
However, no red flags were raised, no mismanagement was officially recorded.
Political and governance questions mount
The revelation has triggered serious concerns: Why has the State not enforced its own audit rules for over a decade? How is financial scrutiny being bypassed despite repeated CAG interventions? Who is responsible for this ₹2 lakh crore transparency vacuum?
Legal experts say this is not just an administrative lapse, but a potential violation of constitutional principles governing local self-government.
What next?
With RTI evidence out in the open, pressure is likely to mount over the State government to immediately initiate pending audits and present reports in the Assembly.
Activists and former bureaucrats argue that independent CAG oversight and public disclosure of audit findings are the only way to restore credibility.
However, with seven years already lost in some corporations, the process of auditing such massive backlogs will be long, complex and politically sensitive.
Whether the State acts decisive or let the lapse unchecked will determine the future of transparency and accountability in Gujarat’s urban administration.
Notably, Hemant Kumar Shah said,“If audits are not done, irregularities remain invisible. And when irregularities remain invisible, accountability dies.”
Now, Gujarat’s urban governance is staring at a financial storm.
The revelations, made through an RTI response, expose systemic neglect, violation of audit laws, and a stunning breakdown of financial transparency.
Citizens of these cities have effectively been left in the dark about how public money is being spent. Now, Gujarat’s urban governance is staring at a financial storm.
RTI documents have exposed that not a single audit has been completed for several years for eight major Municipal Corporations: Ahmedabad, Gandhinagar, Rajkot, Jamnagar, Bhavnagar, Junagadh, Surat and Vadodara.
The data, obtained from the Director of the Local Fund Accounts Office in response to an RTI filed under Section 4(1) of the Act, reveals how thousands of crores of rupees in civic funds have remained unaudited, violating the Gujarat Local Fund Audit Act, 1963.
The backlog means that over Rs 2 lakh crore of municipal expenditure across Gujarat’s largest cities has never undergone mandatory financial scrutiny.
With an annual budget of around ₹12,000 crore in 2024–25, the Ahmedabad civic body hasn’t completed an audit since 2017–18, which roughly translates to approximately ₹50,000 crore in unverified accounts for just one city.
Similar patterns are seen in Surat and Vadodara, while other corporations have remained unaudited for four to six years. Experts say that this is not a mere technical lapse, but a deep governance failure.
Ignored directives, defied laws
This financial vacuum exists despite clear legal obligations and repeated directives. Notably, the Gujarat Local Fund Audit Act, 1963, under Section 4 mandates annual audits of all local bodies.
The 11th Central Finance Commission (2000–05) had recommended that the audit of Municipal Corporations be done under the guidance of the Comptroller and Auditor General (CAG), with reports submitted to the State Assembly.
A Finance Department resolution on May 6, 2005, and later a circular on December 23, 2011, made this legally binding. The CAG had also flagged the non-compliance in August 2009, urging Gujarat to ensure timely audits.
In 2011, Section 108A was added to the Gujarat Provincial Municipal Corporations Act, 1949, to reinforce the obligation. Yet, the RTI reply confirms that none of these directives have been implemented effectively.
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| Last Audited Year, Municipal Corporation and Pending Years |
These reports were to be presented before the Assembly, debated, and acted upon. Instead, the process has been derailed for over a decade.
Neither the CAG nor the Local Fund Audit Office has enforced strict timelines, and successive governments have allowed this crisis to deepen.
RTI applicant raised red flag
RTI Activist and Professor Hemant Kumar Shah has slammed the government, alleging a deliberate shielding of irregularities. “In a democracy, the audit report for the previous financial year should be presented in the new year, debated by corporators, and acted upon as per rules. If the audit itself is not done for years, transparency collapses, and irregularities get buried,” Shah claimed.
He further alleged, “This is a clear violation of the Gujarat Local Fund Audit Act, 1963. The State Assembly has failed in its duty to ensure annual presentation of audit reports. Transparency is a fundamental principle of democracy. When ₹2 lakh crore goes unaudited, the public’s right to know how their money is used is crushed.”
Citizens kept in the dark
The lack of audits not just weaken financial scrutiny but also denies Gujarat’s urban citizens of transparency over how civic budgets are spent on critical services like roads, water, housing, and sanitation.Over two crore people live in these eight municipal areas.
However, no red flags were raised, no mismanagement was officially recorded.
Political and governance questions mount
The revelation has triggered serious concerns: Why has the State not enforced its own audit rules for over a decade? How is financial scrutiny being bypassed despite repeated CAG interventions? Who is responsible for this ₹2 lakh crore transparency vacuum?
Legal experts say this is not just an administrative lapse, but a potential violation of constitutional principles governing local self-government.
What next?
With RTI evidence out in the open, pressure is likely to mount over the State government to immediately initiate pending audits and present reports in the Assembly.
Activists and former bureaucrats argue that independent CAG oversight and public disclosure of audit findings are the only way to restore credibility.
However, with seven years already lost in some corporations, the process of auditing such massive backlogs will be long, complex and politically sensitive.
Whether the State acts decisive or let the lapse unchecked will determine the future of transparency and accountability in Gujarat’s urban administration.
Notably, Hemant Kumar Shah said,“If audits are not done, irregularities remain invisible. And when irregularities remain invisible, accountability dies.”
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