CAG report smells rat in central schemes in Bihar

The CAG report for the fiscal year of 2007-08, tabled in the state Assembly on July 10, has not only found misappropriation of fund but has also indicated embezzlement in many such schemes including Mid-Day meal, Swarnjayanti Gram Swarozgar Yojana

CJ: Amitabh Himwan

Thu, Jul 16, 2009 09:45:59 IST

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CAG of India :

AS A testimony to many ironies being found in the financial health of the state government, the report of the Comptroller and Auditor General of India (CAG) for the fiscal year of 2007-08, tabled in the state assembly on Thursday (July 10), has smelt rat in some of the centrally funded popular schemes.

The CAG report has not only found misappropriation of fund but it has also indicated embezzlement in many such schemes including Mid-Day meal, Swarnjayanti Gram Swarozgar Yojana and Accelerated Irrigation Benefit Programme.

According to the report, despite there was increase in enrollment and retention of students in urban as well as rural schools lifting and utilisation of the food grains was poor. The report said that 563.75 MT of rice valuing Rs 90.20 lakh rotted due to poor storage.

“The average number of days, on which cooked meal was served ranged between 92 to 108 days and 94 to 106 days in urban and rural schools respectively against 200/220 days prescribed in the scheme. In nine to seventeen schools no meal was served,” the report pointed out.

“Fraudulent activities in the running of the scheme in the state can not be ruled out,” said Arun Kumar Singh, principal accountant general (Audit) while releasing the report to media.

“Against target for construction of 35,226 kitchen sheds only 3,599 such sheds were reported complete as of March, 2008. In test-checked schools 91 per cent of the schools did not have kitchen shades and 31 per cent schools did not have adequate drinking and water facilities, he said adding, “There was complete absence of internal controls, regular monitoring and evaluation of the scheme as per the guidelines.”

Painting similar picture for Swarnjayanti Gram Swarozgar Yojana, Singh said that although, it was launched as a single programme by integrating all components of erstwhile rural employment and poverty eradication programmes to cover all aspects of self employment for the rural people, the scheme suffered from poor utilisation, large scale diversion and misutilisation of fund, doubtful payments, injudicious selection NGOs, non completion of projects on time and inadequate monitoring.

The report observed that despite significant investment Accelerated Irrigation Benefit Programme could not accelerate the utilisation of irrigation potential due to non-compliance with pre-project activities, diversion of fund, unplanned execution of works and unauthorised expenditure.

The CAG has also detected several weaknesses in the urban development and housing department such as non-compliance with rules, absence of departmental manuals, lack of discipline in budget preparation, weak expenditure control along with poor implementation of schemes and lack of monitoring and evaluation.

Interestingly, the report found that loan of Rs 240.75 crore and interest amounting to Rs 102.60 crore recoverable from urban local bodies could not be monitored in absence of loan register.

Similarly, the CAG audit unearthed massive amount of misappropriation of government money and loss to the exchequer in building and road construction department, rural development, rural works, water resources, agriculture, PHED and social welfare departments.

The report said that unauthorised payment of salary to the tune of Rs 3.86 crore to teachers and scientists was made in Rajendra Agricultural University due to irregular fixation of pay.

In the social welfare department, the report remarked, nutritional aid to adolescent girls, expectant mothers and nursing mothers could not be provided despite availability of funds and Rs 11.82 crore remained blocked for two to four years with Food Corporation of India, State Food Corporation and district welfare officer.

The audit report also disclosed that Indira Awaas Yojana fund amounting to Rs 1.01 crore was misutilised by providing benefit to ineligible beneficiaries in violation of the guidelines.

Also, talking about the lackluster functioning of Bihar State Electricity Board, the report said that the board incurred unfruitful expenditure of Rs 16.47 crore on purchase and installation of electronic meters and avoidable expenditure of Rs 1.99 crore on purchase of and transportation of PSC poles.

It said that the board lost Rs 3.24 crore due to inadequate action in cases relating to theft of materials.

“The failure of the cables laid across Mahatma Gandhi Setu and associated over head transmission lines by the board resulted in unfruitful expenditure of Rs 43.06 crore,” the CAG asserted.

The report has also exposed that for non-filing of income-tax returns for 1997-99 from Bihar Rajya Pul Nirman Nigam Limited resulted in avoidable payment of income tax of Rs 1.06 crore and it also could not set off its loss incurred in 1997 against the profit earned in 2005-06.

However, there was a portion in the report about the finances of the government under which state government can take cover. As per the CAG, the state experienced improvement in its fiscal position during 2007-2008 in terms of key parameters (revenue, fiscal, primary deficit/ surplus) in relation to their values in 2006-07.

In comparison to gross state domestic product (GSDP), the fiscal deficit has declined from 3.05 per cent in 2006-2007 to 1.62 during the current year.

This noteworthy development, however, has its genesis in the fact that a significant share (between 74 to 81 per cent) of the revenue receipts of the state is contributed by central transfers comprising of state’s share of taxes and duties and grants-in-aid during the period 2003 to 2008.

It also suggests that any government claim of better financial position could be set off by the fact that state could raise only Rs 5, 611.12 crore of revenue out of total revenue receipts of Rs 28, 209.08 crore for the FY 2007-2008.

“The state government could raise only 20 per cent of total revenue,” Singh clarified.

On taxes on sale, trade and etc, the report said, failure of the department to frame detailed guidelines on cross verification of records of the buying department with the taxation department resulted in non realisation of tax of Rs 106.26 crore.

And, about state excise, in the four excise districts, the retail licensees did not lift the minimum guaranteed quota during 2006-2007 which led to the loss of revenue of Rs 39.44 crore, the CAG pointed out.

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