It said the stations were non-functional due to various reasons such as equipment theft, dismantling due to inadequate security and non-installation of radar sensors/bubbler.
Telemetry stations collect data at remote or inaccessible points and transmit them to receiving equipment for monitoring.
"Scrutiny of records at the Ministry of Water Resources revealed that out of 375 telemetry stations for which information was made available by the ministry, 222 telemetry stations were non-operational," the CAG said.
As a result, real time data was not available, it said.
The stations were non-operational during different periods, stretching from June 2007 to March 2016.
The affected divisions included: Upper Yamuna, Himalayan Ganga-II (Lucknow), Middle Ganga (Varanasi), Middle Ganga-IV and V (Patna), Middle Brahmaputra (Guwahati), Lower Brahmaputra (Jalpaiguri), Krishna and Coordination Circle (Hyderabad), CWC (Chennai) and Tapi (Surat).
The CAG noted data was used in a formulation of flood forecast only after comparing the telemetry data with manually observed information.
"In the case of mismatch of information between the two sets of data, the manual data was adopted," the auditor general added.
Thus, the CWC did not depend on telemetry data even after investing in the modernisation of telemetry station network for nearly 20 years, it said.
"This defeated the purpose of establishment of the equipment for meeting the requirement of real time data collection, its transmission and flood forecast formulation," the CAG said.
It said the ministry has told the CAG that efforts are being made to make telemetry stations functional at the earliest.
The CAG has recommended the CWC to devise a time-bound action plan to operationalise the stations.