Direct LPG subsidy savings only 15% of govt claim: CAG

According to a CAG report, which was tabled in both the houses of the Parliament on Friday, only Rs 1,764 crore in subsidy was saved on LPG on account of the scheme and the bulk of Rs 21,552 crore was due to sharp fall in global prices.

In a report titled implementation of PAHAL (DBTL) scheme, the CAG said, “The actual subsidy payout during the period from April 2015 to December 2015 was Rs 12,084.24 crore as against Rs 35,400.46 crore during April 2014 to December 2014.”

The significant reduction of Rs 23,316.12 crore in subsidy payout was on account of the combined effect of decrease in offtake of subsidised cylinders by consumers and lower subsidy rates arising from the sharp fall in crude prices in 2015-16, the report said.

The CAG conducted an audit of implementation of PAHAL scheme by the three public sector oil marketing companies (OMCs) for the period January to October 2015. The report brought out the system deficiencies noticed in audit of database of consumers maintained by 34 per cent of distributors of these OMCs. The report also commented upon the financial impact of the scheme as worked out by the Petroleum Ministry and OMCs and examined the impact of fall of crude prices on the savings on account of PAHAL scheme.

The report highlighted that a total of 47.23 lakh consumers did not receive permanent advance amounting to Rs 169.09 crore as on October 31, 2015.

The report also found various shortcomings in the IT system of OMCs for implementation of the scheme and drawbacks in input controls which resulted in depriving eligible beneficiaries of the benefits of the scheme.

The report commented upon the duplicate consumers noticed within the OMCs and across the three OMCs on the basis of de-duplication check done on name, address, Aadhaar number and bank IFSC, bank account number and registered mobile number.

The report also highlighted invalid entries in the consumer with respect to date of birth, PIN codes, Aadhar number and bank IFSC which compromised the authenticity and integrity of the consumer database. The issuance of subsidised LPG cylinders beyond the permissible quota of 12 cylinders per annum and payment of permanent advance to duplicate connections noticed in audit examination, the report said.

The report analysed the subsidy outgo from April to December in the financial year 2014-15 and 2015-16. “The subsidy burden over the period from April 2015 to December 2015 was lower than that for the comparable period in 2014 by Rs 23,316.21 crore.  However, this was a combined effect of decrease in off-take of subsidised cylinders by consumers (Rs 1,763.93 crore) and lower subsidy rates arising from the sharp fall in crude prices (Rs 1,552.28 crore) in 2015-16,” Deputy CAG Pradeep Rao said, while briefing about the findings of the report.

Auditor raps Fin Min for lack of transparency in FRBM disclosure 
The Comptroller and Auditor General of India has pulled up the Finance Ministry for not making “sound” assumptions in the Budget documents as well as lack of transparency in its disclosures under the Fiscal Responsibility and Budget Management (FRBM) Act.

“The targets of fiscal indicators contained in the Medium Term Fiscal Policy Statement should be based on underlying assumptions which could be the base for preparing the Budget for the relevant year,” it said in an audit report on the compliance of the FRBM Act, 2003.

In the first-ever such audit, the CAG also noted that the projection for 2014-15 included in the Medium Term Fiscal Policy Statement in respect of gross tax revenue, outstanding liabilities, and disinvestment varied significantly from the actuals.

Similarly, projections for various heads of expenditure for 2014-15 in the Medium Term Expenditure Framework Statements of 2013-14 varied significantly in the Budget (BE) and Revised Estimates (RE).

The CAG also noted a structural imbalance in the composition of expenditure as the Plan expenditure to fiscal deficit ratio slipped to 90.6 in the RE from the BE of 108.3.  Significantly, the CAG also highlighted lack of transparency in direct tax receipt figures and lack of information on the quantum of refunds.

‘DST set up autonomous body in irregular manner’
The Comptroller and Auditor General (CAG) on Friday has rapped the Department of Science and Technology (DST) for setting up an autonomous body in an “irregular” manner without seeking Cabinet approval and releasing funds to the tune of Rs 241.04 crore for it during 2009-2014.

The report also disclosed that scientists working in autonomous bodies (ABs) under DST were being paid salaries higher than government approved pay structures. “Two national research and training institutes under DST did not adopt the UGC approved pay structure which was applicable to academic teaching staff,” the CAG said in its report.

The CAG further said that the department had submitted a proposal before Expenditure Finance Committee (EFC) for the approval of a project, ‘Establishment of Advanced Research Centre for Powder Metallurgy’, under Integrated Long Term Programme in Hyderabad at a cost of Rs 46.27 crore for the years 1989-95.

Envisaged as a joint venture between India and erstwhile USSR, the project was approved in May 1990 by Cabinet Committee on Economic Affairs. Meanwhile, the CAG said that the DST formed a society ‘Advanced Research Centre for Powder Metallurgy’ through a Memorandum of Association (MoA) signed by seven members and registered in October 1990 under Andhra Pradesh (Telangana area) Public Societies Registration Act. 

The society named ‘Indo-Soviet Advanced Research Centre for Powder Metallurgy’ on November 7, 1991 was renamed ‘International Advanced Research Centre for Powder Metallurgy and New Materials’ (ARCI) on March 17, 1994 in view of dissolution of the USSR. The CAG though observed the formation of ARCI as an AB was not in line with rule 208 of General Financial Rules (GFRs) which states that no new autonomous institution should be created by ministries or departments without Cabinet approval.
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