What is the common examiner trap about Polity in UPSC exams?

The trap is to confuse 'below estimates' with 'above estimates' or to swap the percentage (93% vs 96%). Also, note that CAG is an auditor, not a regulator—don't misattribute enforcing powers.

What should UPSC aspirants remember about Polity for Prelims?

1. Target this Data: 93% of 5,011 works awarded below estimates (Jan 2022–Jan 2023) 2. Target this Nodal Body: CPWD (Central Public Works Department) under Ministry of Housing and Urban Affairs 3. Target this Legal Point: CAG's constitutional role under Article 148

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CAG Flags Unrealistic DSR 2021 Rates: 93% CPWD Projects Awarded Below Estimates

Q: Which constitutional body is responsible for auditing the accounts of the Government of India?

Comptroller and Auditor General, The CAG is established under Article 148 of the Indian Constitution and audits the receipts and expenditure of the government. The Finance Commission deals with fiscal transfers, NITI Aayog is a policy think tank, and UPSC handles civil services recruitment.

Q: Consider the following statements regarding the CAG report on CPWD: 1. The CAG found that CPWD's DSR 2021 rates were based on proper market surveys. 2. 93% of CPWD projects were awarded at costs lower than estimated costs. 3. The CAG flagged a faulty process for calculating contractor profit and overhead charges. Which of the statements given above is/are correct?

Both 2 and 3, Statement 1 is incorrect because the CAG found that CPWD did not conduct market surveys before revising DSR 2021. Statement 2 is correct as per the article, and statement 3 is also correct as the CAG flagged the faulty process.

Q: According to the CAG report, what percentage of CPWD works were awarded at costs lower than the estimated costs based on DSR 2021?

93%, The article specifically mentions that 4,666 out of 5,011 works (93%) were awarded at tendered costs less than the estimated cost. Other percentages are distractors.

Q: What is the primary concern highlighted by the CAG regarding unrealistic rates in CPWD's Schedule of Rates?

It may result in undue benefit to contractors, The CAG warned that if rates are higher than market rates, the estimated project cost increases, which may result in undue benefit to contractors. While delays and quality are concerns, the report specifically focuses on cost overestimation and contractor benefits.

Polity EconomyHIGH

Target:UPSC GS-IIMPSCSSC GATeachingPrelims HighMains MediumStatic GK Link

13 Aug 2026

~2 min

Source: Indian Express

Key Data:93%5,011 works₹2,027.33 crore₹3,100.57 crore₹4,314.08 crore

Bodies:CAGCPWD

Practice MCQs from today's news ▸

~2 min · Quick mode

What This Article Covers

1.CAG flagged unrealistic rates in CPWD's Delhi Schedule of Rates 2021, with 93% of 5,011 works awarded below estimates.

2.CPWD did not conduct market surveys before revising DSR 2021, leading to inflated project cost estimates.

3.Faulty contractor profit/overhead calculation process also criticized, with budget estimates rising from ₹2,027 crore to ₹4,314 crore in three years.

The Big Picture

Prelims · HighMains · Medium

CAG's audit of CPWD reveals that 93% of projects were awarded below estimated costs due to unrealistic Schedule of Rates (DSR 2021), leading to potential cost overestimation and undue benefits to contractors. This highlights systemic issues in public works estimation that impact budgetary accuracy and governance.

Exam Lens

Quick Exam Facts From News

Projects below estimates93% (4,666 out of 5,011 works)

Time period analyzedJanuary 2022 – January 2023

Budget Estimates (2020-21)₹2,027.33 crore

Budget Estimates (2021-22)₹3,100.57 crore

Budget Estimates (2022-23)₹4,314.08 crore

1-Minute Revision

›Projects below estimates: 93% (4,666 out of 5,011 works)
›Time period analyzed: January 2022 – January 2023
›Target this Data: 93% of 5,011 works awarded below estimates (Jan 2022–Jan 2023)
›Target this Nodal Body: CPWD (Central Public Works Department) under Ministry of Housing and Urban Affairs
›Target this Legal Point: CAG's constitutional role under Article 148

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News Snapshot

📉

Unrealistic Rates

CAG found DSR 2021 rates were not based on market surveys, leading to inflated cost estimates.

🏗️

93% Projects Below Estimates

Majority of CPWD works were awarded at costs lower than estimated, indicating overestimation.

💰

Budgetary Impact

CPWD's budget estimates rose significantly from ₹2,027 crore to ₹4,314 crore, raising concerns over public fund utilization.

Detailed Analysis & Strategic Depth

Context / Background

CPWD is the primary central government agency for construction and maintenance of public infrastructure. It uses the Delhi Schedule of Rates (DSR) as the basis for estimating project costs and tendering. The DSR is revised periodically, but the 2021 revision was done without conducting market surveys, leading to rates that did not reflect actual market conditions.

Core Analysis & Implications

The CAG report highlights that 93% of projects were awarded below estimated costs, indicating a systematic overestimation. This not only inflates budget requirements but can also lead to undue benefits to contractors if rates are higher than market. The faulty calculation of contractor profit and overheads further distorts cost estimation, affecting project viability and public expenditure efficiency.

Future Outlook / Way Forward

CPWD needs to revise its methodology for collecting base rates, incorporating real-time market surveys and data analytics. Transparent and realistic schedules will improve budget accuracy, reduce cost overruns, and ensure fair tendering. The CAG report serves as a critical input for reforming public procurement processes.

Key Facts at a Glance

Projects below estimates93% (4,666 out of 5,011 works)

Time period analyzedJanuary 2022 – January 2023

Budget Estimates (2020-21)₹2,027.33 crore

Budget Estimates (2021-22)₹3,100.57 crore

Budget Estimates (2022-23)₹4,314.08 crore

You've read the full analysis. Now test your understanding.

Practice exam-style questions based on this article.

Q1Static LinkageEasyUPSC, SSC, State PSC

Which constitutional body is responsible for auditing the accounts of the Government of India?

Q2Statement-basedHardUPSC, SSC

Consider the following statements regarding the CAG report on CPWD:

1. The CAG found that CPWD's DSR 2021 rates were based on proper market surveys.

2. 93% of CPWD projects were awarded at costs lower than estimated costs.

3. The CAG flagged a faulty process for calculating contractor profit and overhead charges.

Which of the statements given above is/are correct?

Q3Data-centricMediumUPSC, SSC, Banking

According to the CAG report, what percentage of CPWD works were awarded at costs lower than the estimated costs based on DSR 2021?

Q4Application/ImpactMediumUPSC, SSC, Banking

What is the primary concern highlighted by the CAG regarding unrealistic rates in CPWD's Schedule of Rates?

All 15 MCQs ▸

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CAG Flags Unrealistic DSR 2021 Rates: 93% CPWD Projects Awarded Below Estimates

Exam Lens

Quick Exam Facts From News

1-Minute Revision

News Snapshot

Unrealistic Rates

93% Projects Below Estimates

Budgetary Impact

Detailed Analysis & Strategic Depth

Context / Background

Core Analysis & Implications

Future Outlook / Way Forward

Prelims Flashpoints

Key Facts at a Glance