Audit questions March 31 government decision exempting Virtual Personal Deposit Accounts from treasury rules; says State accounts overstated revenue expenditure
Mumbai: Maharashtra’s reported revenue deficit of ₹29,994.76 crore for 2024-25 was overstated by ₹20,993.06 crore because unspent government funds remained parked in Virtual Personal Deposit Accounts (VPDAs) instead of being transferred back to the Consolidated Fund at the end of the financial year, the Comptroller and Auditor General (CAG) has observed.
According to the audit, had these unspent balances been credited back to the Consolidated Fund as required under the Maharashtra Treasury Rules, the State’s revenue deficit would have stood at ₹9,001.70 crore instead of the officially reported ₹29,994.76 crore.
The CAG has also questioned a Government Resolution issued on March 31, 2025, which exempted Virtual Personal Deposit Accounts from the treasury rule requiring year-end transfer of unspent balances to the Consolidated Fund.
The audit observed that the exemption was contrary to Rule 495 of the Maharashtra Treasury Rules, 1968, and weakened the transparency and reliability of the State’s accounts because expenditure continued to be reflected as final even though substantial amounts remained unspent in the deposit accounts.
What are VPDAs?
Virtual Personal Deposit Accounts are government deposit accounts created to keep sanctioned funds within the government accounting system instead of allowing them to remain in bank accounts of Drawing and Disbursing Officers.
The system was intended to improve financial discipline by ensuring that unspent money remained traceable within government accounts.
However, the CAG observed that the system had resulted in the continued retention of large unspent balances and enabled year-end parking of funds without actual utilisation.
Massive year-end transfers
The audit found that the State transferred ₹89,005.21 crore from the Consolidated Fund to Virtual Personal Deposit Accounts during 2024-25.
Of this amount, ₹39,782.13 crore was transferred during March 2025 alone, including ₹6,920.71 crore on March 31, the final day of the financial year.
The CAG said such concentration of transfers at the end of the financial year indicated the practice of parking funds instead of actual expenditure.
Impact on State finances
Because the money remained in the deposit accounts instead of being returned to the Consolidated Fund, government accounts continued to reflect it as expenditure even though it had not actually been utilised.
The audit stated that this accounting treatment resulted in:
- Overstatement of revenue expenditure;
- Overstatement of the revenue deficit; and
- Understatement of the cash balance available with the State Government.
The CAG noted that the cumulative balance lying in Virtual Personal Deposit Accounts at the end of March 2025 stood at ₹20,993.06 crore.
According to the audit, had this amount been transferred back to the Consolidated Fund before the close of the financial year, Maharashtra’s reported revenue deficit would have reduced from ₹29,994.76 crore to ₹9,001.70 crore.
CAG recommendation
The CAG has recommended that the Maharashtra Government review the functioning of the VPDA system and ensure that year-end unspent balances are credited back to the Consolidated Fund in accordance with the Maharashtra Treasury Rules.
It said this would improve transparency, ensure more accurate presentation of government expenditure and provide a truer picture of the State’s fiscal position.
