The Comptroller and Auditor General of India (CAG) has just tabled critical reports in Parliament that have sparked serious discussions about India’s defence recruitment and state financial health.
In its latest audit, the CAG has highlighted a worrying trend: despite having dedicated quotas, a large number of seats reserved for National Cadet Corps (NCC) cadets in the Armed Forces are lying vacant. At the same time, the top auditor has warned about “broken data” in state budgets, where spending is being misclassified to hide actual deficits.
If you are following government exams, defence news, or economic updates, here is a detailed breakdown of what the CAG has revealed and why it matters.
1. The Defence Concern: NCC & Sainik Schools Falling Short
The most shocking revelation from the recent winter session report is about the recruitment pipeline for the Indian Army, Navy, and Air Force. The CAG pointed out that the institutions meant to feed officers into the military—Sainik Schools and the NCC—are failing to meet their targets.
- NCC Vacancies: The audit found that nearly 38% of vacancies reserved specifically for NCC cadets in the Armed Forces could not be filled between 2019 and 2022.
- Sainik Schools Decline: These schools are known as the “nursery of military leadership.” However, the percentage of Sainik School students joining the National Defence Academy (NDA) has dropped from 13.4% (2019-20) to just 10.5% (2020-21).
- Why is this happening? The report suggests that while there is no shortage of female cadets qualifying, the selection rate for male cadets has seen a sharp dip. The CAG has asked the Ministry of Defence to take “concrete measures” to improve training standards so cadets can clear the rigorous Services Selection Board (SSB) interviews.
2. The Economic Warning: “Broken Data” in State Finances
Apart from defence, the CAG has raised a red flag on how Indian states are managing their account books. In a report titled “Broken Data”, the auditor noted that several state governments are misclassifying their spending to look financially healthier than they actually are.
Read more: What is UGC?
- Hiding the Deficit: States are booking “revenue expenditure” (daily running costs) as “capital expenditure” (asset creation). This makes it look like they are building roads and bridges, when they are actually just paying salaries or bills.
- Off-Budget Borrowing: Some states are taking loans through state-run companies so that the debt doesn’t show up directly on the state government’s official books.
- Impact: This “data distortion” makes it difficult for the Central Government and the Finance Commission to understand the true economic situation of a state.
3. Railway Safety: Signalling Failures
In another significant observation, the CAG flagged safety risks in the South Western Railway zone. The audit recorded nearly 3,000 signalling failures per year.
- This is a serious safety concern, especially after recent pushes to upgrade railway infrastructure with Kavach systems.
- The CAG has called for immediate “stronger maintenance” protocols to prevent accidents and train delays.
Why This Matters for You
- For Aspirants: If you are an NCC cadet or Sainik School student, expect the government to introduce stricter training modules or new incentives to fill these vacancies soon. The selection process might get more focused mentorship.
- For Taxpayers: The “Broken Data” report means that state governments might face stricter rules from the Centre regarding loans and grants in the upcoming 2026 Budget.
- For Commuters: The railway audit puts pressure on the Railway Ministry to prioritize safety maintenance over just launching new trains.
What Comes Next?
The Public Accounts Committee (PAC) of Parliament will now examine these reports. The Ministry of Defence is expected to issue a response regarding the NCC shortfall, and the Finance Ministry may issue new accounting guidelines for states before the next fiscal year begins in April 2026.
Frequently Asked Questions (FAQs)
Q1: What is the full form of CAG?
CAG stands for Comptroller and Auditor General of India. It is the supreme audit institution of India responsible for auditing all receipts and expenditure of the Government of India and State Governments.
Q2: Who is the current CAG of India?
As of January 2026, Shri K. Sanjay Murthy is the Comptroller and Auditor General of India. He took charge in November 2024.
Q3: What did the CAG say about NCC cadets?
The CAG reported that 38% of the seats reserved for NCC cadets in the Armed Forces remained unfilled because candidates failed to clear the selection process (SSB interview).
Q4: Why are states being criticized for “Broken Data”?
States are being criticized for recording their expenses under the wrong headings to show a lower fiscal deficit. This hides the true debt burden of the state.
Q5: What is the role of CAG?
The CAG acts as a watchdog of the public purse. It ensures that public money is spent efficiently and for the intended purpose. Its reports are placed before the Parliament and State Legislatures.