India's Public Finance Needs Accrual Accounting For True Fiscal Health

Hindustan Times · business

India's public finance system largely relies on cash-based accounting, which fails to capture the full picture of government finances. This method overlooks significant liabilities like oil bonds issued for ₹1.4 lakh crore and future pension obligations, which are not recorded as expenses when incurred. Furthermore, cash accounting inadequately tracks the deterioration of existing government assets, unlike accrual accounting which would account for depreciation. While standards for accrual accounting exist, implementation remains a challenge, particularly for urban local bodies.

भारत के सार्वजनिक वित्त को सच्ची वित्तीय सेहत के लिए उपार्जन लेखांकन की आवश्यकता