'Nagaland government wrongly used funds belonging to employees': CAG report

Updated on Feb 20, 2021 08:48 PM IST

The state government failed to discharge its statutory liability as it could not contribute ₹28.57 crore as its matching share under the NPS.

Image for representation. (Getty Images/iStockphoto)
Image for representation. (Getty Images/iStockphoto)
ByAlice Yhoshü, Kohima

The apex auditor, Comptroller and Auditor General of India (CAG) has found that the Nagaland government has incorrectly used the funds belonging to its employees by failing to transfer 62.01 crore under the National Pension System (NPS) to the designated authority.

State government employees appointed on or after January 1, 2010, are covered under the National Pension System which is a defined contributory pension scheme. Under the scheme, employees contribute 10 per cent of their basic pay along with dearness allowances and the state government is required to make a matching contribution.

As per the CAG audit report on state finances for the year ended 31 March 2019, the state government collected 86.74 crore from employees as a contribution towards the NPS and contributed only 58.17 crore as its share towards the scheme. Therefore, failing to discharge its statutory liability as it could not contribute 28.57 crore as its matching share under the NPS.

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Further, the report noted that against a total collected fund of 144.91 crore, the state government transferred 111.47 crore only to the designated authority, the National Securities Depository Limited (NSDL), failing to transfer 33.44 crore to the NSDL for further investment as per the provisions of the scheme.

“Thus, there was a short transfer of 62.01 crore ( 33.44 crore not transferred and 28.57 crore short contribution) to the NSDL and the current liability stands deferred to future year(s),” the CAG report said.

The audit further revealed that the state government has created interest liability on the amount not transferred to the NSDL, incorrectly used the funds that belong to its employees and created uncertainty in respect of benefits due to the employees, while affecting the avoidable financial liability of the government in future and thereby leading to a possible failure of the scheme itself.

The CAG underlined that the state government should ensure that employees’ contributions are fully deducted, fully matched by the government’s contributions, and fully transferred to the designated authority/trustee bank on time to avoid interest liability.

The CAG report was tabled in the state assembly on the last day of the budget session on February 19.

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