A view of the Comptroller and Auditor General of India building in New Delhi. File. | Photo credit: Sushil Kumar Verma
The Comptroller and Auditor General of India (CAG) has issued recommendations to improve transparency and comparability of public expenditure by harmonizing primary allocation units, commonly known as Object Heads, across the Union and all State Governments.
The memorandum states that the recommendation for a uniform structure of the head of the facility has been prepared based on the recommendations of the working group and in collaboration with the Union Finance Ministry. “A revised list of common object heads to be implemented…may be adopted keeping in mind the level of readiness but preferably effective from the financial year 2027-28,” it said.
“For the sake of transparency and uniform representation, the specific practices of states like reservation of state allowances, payments and decree charges, etc. may be captured at the level of head sub-object under the respective head object,” the memorandum said.
“Wide differences between States in the functioning of expenditure at the disaggregated sixth level of expenditure, i.e. Primary Appropriating Unit/Head of Facility, attract the attention of this Office and other stakeholders, including the Finance Commission. Such wide differences in the depiction of expenditure of an economic nature at the disaggregated level have implications for cross-temporal and inter-State comparisons, as well as comparisons with the Union.”
Accordingly, a need was felt to standardize the classification of expenditure at the disaggregated level of the sixth level of expenditure, the CAG said.
The memorandum was accompanied by a comprehensive classification in the revised Object Head structure, which classified expenditure into broad categories such as employee compensation, employee welfare, goods and services, aid and assistance, miscellaneous revenue expenditure, capital expenditure on fixed and intangible assets, financial assets and accounting adjustments.
Published – 19 Nov 2025 20:20 IST
