In a serious indictment of Tamil Nadu’s power utility, the Comptroller and Auditor General (CAG) has raised an alarm over the suspected temporary misappropriation of public funds by Tangedco. According to the CAG’s report on state finances for 2023-24, the electricity distributor collected ₹1,985 crore as electricity tax from consumers but remitted only ₹1,457 crore to the government, retaining ₹507.43 crore.
The national auditor termed this a breach of the Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003, which mandates Tangedco to collect the tax along with energy charges and remit it to the Consolidated Fund of the State – the government’s main account for all revenues.
“The amount of tax collected but not remitted into the consolidated fund as of March 31, 2024, was ₹507.43 crore,” the report stated, adding that Tangedco had also retained ₹19.85 crore as collection charges. It explicitly warned that “such non-remittance to the government account and retaining the collected tax for such a long period is fraught with the risk of suspected temporary misappropriation.”
This practice allows the corporation to use taxpayer money as its working capital, effectively diverting funds meant for public expenditure.
The report also revealed that this is not an isolated incident but a recurring pattern. A similar shortfall identified in earlier audits, amounting to ₹4,264.61 crore for the period from 2019-23, was remitted to the Consolidated Fund only in the last financial year, after adjusting for collection charges of ₹142.16 crore.
The CAG’s findings point to systemic financial mismanagement, highlighting how a state-owned utility has repeatedly failed to comply with statutory requirements, thereby keeping thousands of crores of public money outside the government treasury for extended periods.
(Source: DTNext)
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