CAG smells a rat in UPA's Rs 72k-cr farm debt relief scheme

In a fresh blow to the United Progressive Alliance (UPA), the Comptroller and Auditor General of India has rapped the finance ministry over allegedly serious lapses in implementation of the Rs 71,680-crore (Rs 716.8 billion) agricultural debt waiver and debt relief scheme - a major plank on which the coalition had contested the 2009 general elections.

A report tabled in Parliament on Tuesday showed CAG, after auditing 22.32 per cent of the total number of accounts, had found several ineligible farmers had been given waivers, while many eligible ones had been disqualified by banks.

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Following tabling of the report, the main Opposition BJP attacked UPA, while the Congress found faults with CAG's calculations.

The report said 8.5 per cent of the test-checked accounts that were granted the benefits were not eligible for those. The claims of these 6,822 accounts amounted to around Rs 20.5 crore (Rs 205 million).

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The auditor also found the evidence of tampering, over-writing and alteration of records. CAG has criticised the Department of Financial Services (DFS) for inefficient monitoring of the scheme and not taking adequate action despite being aware of the "numerous flaws in implementation of the scheme".

DFS depended on nodal agencies for monitoring the compliance of its instructions. But, CAG found, the nodal agencies themselves had relied on certificates and data of lending institutions, without carrying out any independent verification.

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DFS also accepted claims from RBI in respect of urban co-op banks, of Rs 335 crore (Rs 3.35 billion), though the number of beneficiaries was not mentioned, it added.

Besides, CAG found Rs 164-crore (Rs 1.64 billion) reimbursements were extended to microfinance institutions, in violation of the guidelines. CAG carried out its review from April 2011 to March 2012, covering 25 states and involving field audit of 90,576 farmers' accounts.

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CAG added debt waiver certificates, which entitled farmers to fresh loans, were not issued to eligible ones in 34 per cent of test-checked accounts.

Whether those issued certificates got loans could not be confirmed as loan application receipt record was not maintained.

BJP spokesperson Prakash Javadekar hit out at the UPA, saying this was a scam of Rs 10,000 crore (Rs 100 billion). Congress spokesperson P C Chacko, speaking to BS, alleged: "This scheme was implemented by various agencies and the Centre only bore the cost. It appears to be a case of disproportionate and exaggerated calculation by CAG."