CAG Report Finds Financial Misuse of Over Rs 8,000 Crore During BJP Rule in MP

BHOPAL: Glaring financial irregularities worth Rs 8,017 crore have been found after a government audit of various departments under the previous Shivraj Singh Chouhan-led BJP government in Madhya Pradesh.

For instance, the Madhya Pradesh Trade and Investment Facilitation Corporation Limited had organised15 foreign tours that entailed an expenditure of Rs 8.96 crore from the funds released to it as grants-in-aid under the head ‘5531-Destination MP Investment Drive’ by the Directorate of Industries of the state, according to the latest Comptroller and Auditor General’s (CAG) report, which was tabled in the Madhya Pradesh Assembly.

In addition, the CAG’s audit on sand mining and its environmental consequences found that the collectors of Balaghat and Ujjain fixed the reserve price on dead rent instead of the estimated quantity of sand in 31 mines, resulting in short realisation of royalty worth Rs 3.37 crore.

Also, executive engineers of 18 divisions failed to recover water tax dues worth Rs 1,489.67 crore from industries, domestic water supply entities and cultivators. In 18 district mining offices (DMOs), royalty of Rs 62.50 crore was not short realised from 58 lessees and 11 contractors, the CAG report further reveals.

These are some glaring anomalies which have come to light after the Comptroller and Auditor General’s (CAG) report of Madhya Pradesh, ended March 30, 2017 tabled in the assembly on January 11, 2019.

The state government failed to ensure submission of utilisation certificates (UC) on grants-in-aid of Rs 18,080 crore, the report stated. The commissioner, Archaeology, Archives and Museums, Bhopal, received Rs 74 crore between 2013-14 and 2014-15 under the 13th Finance Commission. Though the entire amount was unspent and parked in public accounts, the Commissioner furnished UCs for the entire amount, according to the CAG report.

“Financial irregularities and weak fiscal management of the BJP government have been exposed. It is clear from the CAG report how a group was working for the previous government. Losses amounting to crores of rupees have been revealed,” said Chief Minister Kamal Nath after the report was tabled.

According to the report, the state excise department’s failure to prescribe norms for production of alcohol from grains by considering starch content in it, fermentation efficiency (FE) and distillation efficiency (DE) in accordance with technology used by distillers allegedly deprived the government revenue worth at least Rs 1,086 crore. It reported that distillers under-reported production of 8.64 crore PL (proof litre) alcohol.

The government’s policy to only allow distillers of the state to participate in tender process for supply of country liquor without analysing the realistic cost of production led to less competition, cartel formation and undue benefit of Rs 653.08 crore to distillers, the report says. The department failed to impose penalty of Rs 462.77 crore on 12 defaulting manufacturing units that submitted excise verification certificates with delays up to 401 days.

The audit report is scathing on the previous government. “Blocking of funds on incomplete works impinges negatively on the quality of expenditure. Water resources department, PWD, and Narmada Valley Development Authority had 242 incomplete projects, valued at Rs 9,557.16 crore, with cost over-run of Rs 4,800.14 crore in 24 projects (where costs have been revised),” says CAG report for the year ended March 30, 2017.

The auditors found that the Bharatiya Janata Party (BJP)-led government did not constitute a consolidated sinking fund for amortisation of loans unlike other states. This resulted in the state government not contributing Rs 635.72 crore (0.50% of their outstanding liabilities of Rs 1,27, 144.43 crore as on March 1, 2016). This overstated the revenue surplus and understated the fiscal deficit of 2016-17 by Rs 635.72 crore, it says.

The total financial implication of CAG’s findings on the state’s revenue sector was Rs 4,712.16 crore – covering levy and collection of excise duty, assessment of taxes on works contracts and builders under MPVAT Act, sand mining and environment consequences and assessment and collection water tax.

Audit analysis of records relating to all circles revealed that there was no evidence that 646 works contractors who had opted for composition facility for contract amount of Rs 4,535.40 crore during 2013-14 to 2015-16.
 

Mounting attack on BJP after the CAG, the Chief Minister said, “A probe will be conducted. Detailed investigations will be done. We will constitute a Jan Aayog (People’s Commission) and hand it all such cases. Punitive action will be taken against those who were involved. We will spare no one responsible for losses to the government exchequer,” adding: “The CAG report is just a trailer and the full film is yet to come. Keep watching.”

Responding to the report and the CM’s warning, BJP spokesperson Rahul Kothari said not all figures mentioned in the CAG report were relevant because it classifies as irregularities even the failure of municipal bodies to collect water and conservancy tax.