HindustanTimes Mon,22 Dec 2014

CAG slams Modi govt for helping private cos

Mahesh Langa, Hindustan Times  Ahmedabad, April 02, 2013
First Published: 23:08 IST(2/4/2013) | Last Updated: 13:50 IST(3/4/2013)

The Comptroller and Auditor General (CAG) accused the Narendra Modi government of “giving undue benefits to several private companies” in its audit report tabled in the assembly on Tuesday. The top auditor also held the government responsible for causing a loss of close to Rs. 1,000 crore to the state exchequer.


According to the CAG, a Gujarat-based power company received “undue benefits of Rs. 160.26 crore because the state government firm GUVNL did not adhere to the terms of power purchase agreement (PPA) that led to short recovery of penalty of Rs. 160.26 crore”.

Similarly, a levy of ad hoc penalty at lower rates from a south Gujarat-based steel plant resulted in a short recovery of Rs. 238.5 crore. The company had encroached upon government lands measuring 734,000 sq metre, which was regularised by charging ad hoc penalty that was considerably below the market price.

In another land-related case, the CAG has detected a revenue loss of Rs. 128.71 crore due to the granting of 853,000 sq metre at a concessional rate to an engineering and infrastructure conglomerate that has a facility in Hazira near Surat.

“Two ineligible trusts were granted lands at below market rates that caused revenue loss of Rs. 25.05 crore,” the CAG observed.

The CAG also found irregularities in the allotment of lands to an American auto firm that is setting up a new car factory near Ahmedabad.

Gujarat government-promoted Gujarat State Petronet Ltd (GSPL) also passed on “undue benefits of Rs. 52 crore to a private firm in transmission of gas”.

Besides criticising the undue favours to the private firms, the auditor general has also slammed the Modi administration of “poor financial management and lack of proper monitoring by the departments in utilization of grants given for specific purposes”.

The report observed that the state authorities failed to furnish a utilisation certificate of Rs. 9,066.34 crore and warned the state government on continued use of borrowed funds to fund investments that do not have sufficient returns.

The report stated that the state government invested Rs. 39,179 crore in corporations, boards, government companies, rural banks, joint ventures and co-operatives. In the past five years, the average return on this investment was 0.25% while the state government has paid interest at the rate of 7.75% on borrowings from 2007-08 to 2011-12.

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