The Comptroller and Auditor General (CAG) is giving final touches to two reports where it has pointed out anomalies in allocation of funds under the centrally-runJNNURM scheme and UPA government’s debt waiver to farmers in 2008, something the opposition may use as a stick to beat the government during the budget session.
In the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the CAG, sources said, is reviewing how central funds were released to some states despite the civic bodies of those states not fulfilling the laid down guidelines. The funds were linked to reforms to be initiated by these states, and the mission was limited for a seven year period starting 2005-06.
However, in many cases, it was found that no reforms were initiated though the Centre continued to spend all its budget allocation, defeating the goal for which the funds were meant. In some cases, the auditor has pointed at losses due to violation of tender guidelines.
In the farmers’ debt waiver scheme, the CAG has received banking data from RBI and has also examined the books of state-owned banks and regional rural banks. CAG has scanned the disbursement of debt waiver made by public sector banks across the country with sample field visits.
CAG officials involved with the review were tight-lipped though they admitted that they had examined whether state-owned banks were judicious in disbursement and also whether the beneficiaries included only large farmers and those with perennial credit default history. Opposition parties had earlier alleged that marginal farmers were ignored in the debt waiver scheme.
"We have examined how effectively the agricultural debt waiver scheme was implemented," a CAG official said. Though CAG normally doesn’t audit banks, in this case, it audited their books to verify how effective the farm debt waiver was. Banks are usually audited by RBI and chartered accountants.
The debt waiver scheme was announced in the union budget of 2008-09 and covered all agricultural loans disbursed by commercial banks, regional rural banks and cooperative credit institutions to farmers. Political pundits say it helped the UPA government bounce back to power in 2009 as the ruling Congress benefitted largely in states that consumed most of the waiver package.
Andhra Pradesh, Maharashtra and UP were the largest beneficiaries of the 2008 debt waiver package where the Congress got maximum parliamentary seats. The three states alone consumed nearly 40% of the total waiver package offered to farmers across 35 states and Union Territories.
Andhra Pradesh extended the maximum waiver of more than Rs 11,000 crore with about 80 lakh farmers benefiting from the scheme, followed by UP with Rs 10,000 crore to at least 54 lakh farmers and Maharashtra with Rs 9,000 crore to over 42 lakh farmers.
According to the finance ministry, at least 4 crore farmers have benefited from the scheme.