Bhubaneswar, Sept. 29 (UDN): A Comptroller and Auditor General of India (CAG) audit has flagged a series of financial, administrative and regulatory lapses in Odisha’s tourism and transport sectors, including unutilised funds, incomplete tourism projects, weak revenue recovery and deficiencies in vehicle safety enforcement.

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The findings are part of CAG Report No. 2 of 2026, covering subject-specific compliance audits of the Development of Tourism in Coastal Zone in Odisha and the Functioning of State Transport Authority and Regional Transport Offices in Odisha. The report, covering the period up to March 31, 2024, was tabled on September 28, 2026.

Rs 898.48 Crore Parked With Executing Agencies

According to the audit, the Odisha Tourism Department surrendered Rs 103.35 crore from a budget allocation of Rs 2,278.04 crore due to non-utilisation of funds.

The CAG also found that Rs 898.48 crore earmarked for tourism projects remained parked in the bank accounts of nine executing agencies. Reasons cited included pending statutory clearances, lack of administrative approval and non-availability of land.

Of the total amount, Rs 806.44 crore remained parked with the Odisha Tourism Development Corporation (OTDC) and STDC for five years, the audit observed.

Eco-Retreats Reportedly Incurred Rs 207.68 Crore Loss

The audit also highlighted the financial performance of tourism initiatives, stating that the state incurred a Rs 207.68-crore loss in organising seven eco-retreats between 2019-20 and 2023-24.

The OTDC was also found to have failed to recover Rs 10.72 crore from government departments and another Rs 72 lakh from private parties for services including transportation, accommodation and lodging.

The audit further pointed to delays in operationalising beach shacks. According to the CAG, the failure to make the shacks operational blocked Rs 1.25 crore and resulted in estimated potential revenue loss of Rs 45.50 lakh annually.

Several Tourism Projects Remained Incomplete

The audit identified delays and incomplete works under centrally sponsored tourism schemes.

Under the PRASAD scheme, Rs 6.49 crore was spent on infrastructure development covering Puri and other identified locations, but the project remained incomplete.

Similarly, the objectives of the Swadesh Darshan scheme remained unfulfilled despite expenditure of Rs 41.60 crore at Barkul, Satpada, Tampara and Gopalpur.

The CAG also noted that the Bindusagar Lake development project remained incomplete after more than nine years despite expenditure of Rs 8.16 crore.

The Shamuka special tourism area project in Puri district also remained incomplete, with Rs 11.92 crore of expenditure rendered unfruitful, according to the audit.

The objective of developing three Blue Flag beaches at Niladri, Muhan and Pir Jahania in Puri also remained unachieved despite expenditure of Rs 3.78 crore during 2020-25.

CAG Flags Environmental and Fire-Safety Concerns

The audit detected construction of permanent or semi-permanent structures in sanctuary, national park and PRF areas in violation of government instructions and provisions of the Forest Conservation Act, 1980.

The works cited included the beachfront promenade at Ramchandi, widening of the approach road from Puri-Konark Marine Drive and a Panthasala at Talasari. The expenditure on these works totalled Rs 28.84 crore.

The CAG also found that 20 Panthanivas were operating without mandatory fire safety certificates, despite requirements applicable to hotels, lodgings and guest houses.

Tourist arrivals were found to be concentrated in a few coastal districts, with Puri and Khordha together accounting for 48 per cent of tourist inflow during 2019-24. The audit recommended greater focus on developing tourism infrastructure in other coastal districts.

Transport Sector Faces Revenue and Enforcement Gaps

The CAG audit of the State Transport Authority (STA) and Regional Transport Offices (RTOs) also highlighted shortcomings in regulation, tax collection, vehicle safety and enforcement.

The audit found an absence of an effective regulatory mechanism for aggregator services, including the lack of a prescribed base fare. This, according to the report, allowed aggregators to operate without licences and fix fares at their discretion.

The department also failed to ensure uniformity in the levy and collection of one-time motor vehicle tax because the base price for calculating the tax had not been fixed.

Fitness Certificates, HSRPs Raise Concerns

The audit found that motor vehicle tax was accepted without ensuring valid Fitness Certificates in the VAHAN system. As a result, inspection fees amounting to Rs 73.18 lakh involving 9,760 vehicles could not be realised.

Passenger safety was another area of concern. The CAG observed that public service vehicles were registered without ensuring mandatory installation of vehicle location tracking devices and emergency buttons.

The department also failed to ensure High Security Registration Plates on 17.61 lakh vehicles registered before March 2019, while another 1.52 lakh vehicles were registered without HSRPs up to March 31, 2024.

Rs 1,136 Crore in e-Challans Pending

The audit further highlighted the scale of pending enforcement cases.

As many as 39.55 lakh e-Challans involving Rs 1,136.62 crore were pending with RTOs, courts or police authorities, according to the report.

The CAG said the situation allowed vehicles to continue operating without payment of applicable taxes and penalties.

The audit also found that enforcement officials sometimes booked only one or two offences even when vehicles had committed multiple violations. This resulted in non-imposition of fines estimated at Rs 640.87 crore, the report said.

Only 1.83% of Transport Tax Arrears Recovered

The transport department’s recovery mechanism also came under scrutiny.

Against an arrears recovery target of Rs 530 crore, only Rs 9.71 crore, or 1.83 per cent, had been recovered as of August 2024, the CAG observed.

The audit also pointed to deficiencies in the GIS-based Planning and Permit Management System and the Odisha Public Transport and Integrated Commuter System, resulting in manual intervention in the issuance of vehicle permits.

In 75 cases, taxes amounting to Rs 30.23 lakh were either not levied or short-levied on stage carriage permits, with an additional maximum penalty of Rs 60.45 lakh also leviable.

In another 30 cases, ordinary permits were issued instead of express permits, resulting in a reported loss of tax and additional tax amounting to Rs 14.59 lakh.

Road Safety Targets Not Achieved

The CAG also raised concerns over road safety outcomes.

The Road Safety Policy, 2015 had targeted a 50 per cent reduction in road accidents and a 20 per cent reduction in fatalities by 2020, using 2015 as the base year.

However, the audit observed an increasing trend in road accidents, injuries and fatalities during 2019-23, except in 2020.

The findings highlight gaps in financial management, project implementation, revenue recovery, regulatory oversight and road-safety enforcement across the tourism and transport sectors. The report calls attention to the need for stronger monitoring and timely corrective action by the concerned departments.