Madhya Pradesh: CAG unearths massive corruption scheme by Chouhan govt

The CAG exposed massive financial mismanagement, irregularities, misuse of government funds, unauthorized foreign tours, and extension of undue benefits to distillers during BJP rule in Madhya Pradesh

PTI Photo
PTI Photo

LS Herdenia/IPA

The BJP suffered a serious setback when the Comptroller and Auditor General (CAG) exposed massive financial mismanagement, irregularities, misuse of government funds, unauthorized foreign tours, and extension of undue benefits to distillers during BJP rule in Madhya Pradesh. The government failed to ensure submission of utilisation certificates (UCs) on grants-in-aid of ₹18,080.10 crore, says the latest CAG report.

“Financial irregularities and weak fiscal management of the BJP government have been exposed. It is clear from the CAG report how a group was working for the previous government. Losses amounting to crores of rupees have been revealed,” said Chief Minister Kamal Nath. “I have been saying from the very beginning that corruption took over the last government. A probe will be conducted. Detailed investigations will be done. We will constitute a Jan Ayog (People’s Commission) and hand it over all such cases. Punitive action will be taken against those who were involved. We will spare no one responsible for losses to the government exchequer,” the CM warned, adding: “The CAG report is just a trailer and the full film is yet to come. Keep watching.”

“Blocking of funds on incomplete works impinges negatively on the quality of expenditure. Water resources department, PWD, and Narmada Valley Development Authority had 242 incomplete projects, valued at ₹9,557.16 crore, with cost over-run of ₹4,800.14 crore in 24 projects (where costs have been revised),” says CAG report for the year ended March 30, 2017.

According to the report, the government did not constitute a consolidated sinking fund for amortization of loans unlike in other states. This resulted in the state government not contributing ₹635.72 crore (0.50% of their outstanding liabilities of ₹1,27,144.43 crore as on 31 March 2016). This overstated the revenue surplus and understated the fiscal deficit of 2016-17 by ₹635.72 crore, it says.

Fifteen foreign tours were organised by the Madhya Pradesh Trade and Investment Facilitation Corporation Limited at an expense of ₹8.96 crore from funds released to it as grants-in-aid under the head “5,531-Destination MP Investment Drive” by Directorate of Industries (DoI), GoMP.

The total financial implication of CAG’s findings on the state’s revenue sector was ₹4,712.16 crore – covering levy and collection of excise duty, assessment of taxes on works contracts and builders under MPVAT Act, sand mining and environment consequences and assessment and collection water tax. The audit found that the excise department failed to prescribe “suitable or any norms” for production of alcohol from grains by taking into consideration starch content in grains, fermentation efficiency and distillation efficiency in accordance with the technology employed by distillers, which deprived the government of a minimum revenue of ₹1,086.65 crore. Failure to revise fermentation efficiency and distillation efficiency deprived the government of another ₹82.54 crore in excise duty.

The government failed to impose penalty of ₹462.77 crore on 12 defaulting distillers’ units that submitted excise verification certificates with delays up to 401 days. The government’s policy to only allow distillers of the state to participate in tender process for supply of country liquor without analysing the realistic cost of production led to less competition, cartel formation and undue benefit of ₹653.08 crore to distillers, the report says.

Collectors of Balaghat and Ujjain fixed the reserve price on dead rent instead of the estimated quantity of sand in 31 mines resulting in short realisation of royalty of ₹3.37 crore. Executive engineers of 18 divisions failed to recover water tax dues worth ₹1,489.67 crore from industries, domestic water supply entities and cultivators. In 18 district mining offices (DMOs), royalty of ₹62.50 crore was not /short realized from 58 lessees and 11 contractors.

The total financial implication of CAG’s findings on the state’s revenue sector was ₹4,712.16 crore – covering levy and collection of excise duty, assessment of taxes on works contracts and builders under MPVAT Act, sand mining and environment consequences and assessment and collection water tax

Both BJP and Congress have started preparations for the Lok Sabha elections in Madhya Pradesh. At present Congress holds only three seats while the BJP’s tally is 26. The Congress won only two seats in the 2014 general elections. The victorious candidates were Kamal Nath and Jyotiraditya Scindia. But their victories in the strict sense cannot be termed as victory of Congress. They owe their election to their personal popularity.

While Kamal Nath since 1980 has never tasted defeat, Scindia too never lost any election. Not only Jyotiraditya, any other member of Scindia family, including his grandmother Rajmata Vijayaraje Scindia, father Madhv Rao Scindia and his aunt Yashodhara Raje Scindia never lost any election. They have the advantage of belonging to Scindia royal family. In fact, Madhav Rao once defeated Atal Behari Vajpayee in Gwalior constituency. Thus, if credit for their victories is given to themselves, one can say that not a single Congress candidate was elected in 2014. But in the bye-election for Ratlam Lok Sabha constituency held in 2015 Congress candidate Kanti Lal Bhuria defeated the BJP candidate.

According to the analysis of the just concluded Vidhan Sabha elections, Congress can now hope to win 12 Lok Sabha seats. They could possibly be Chhindwara, Guna, Ratlam, Dhar, Khargone, Betul, Mandla, Shahdol, Balaghat, Morena, Bhind and Gwalior.

In Madhya Pradesh every Lok Sabha seat has eight segments (assembly constituencies). In all the above-mentioned Lok Sabha constituencies Congress won a majority of assembly seats in Ratlam, Dhar, Khargone, Mandla, Balaghat, Morena, Bhind, Gwalior and Chhindwara Lok Sabha Constituencies. Besides, there are some such Lok Sabha seats where the Congress has won four out of eight segments. The most interesting fact is that among the Lok Sabha seats which the Congress hopes to win majority are reserved constituencies. According to reliable sources, Congress has decided to make one minister and four party MLAs in charge of each Lok Sabha Constituency. This team will be accountable for the party’s performance in each constituency.

BJP too has started preparations for the Lok Sabha polls. Party president Amit Shah has constituted an eight-member team for each constituency. Besides, a team of six members each consists of one in-charge and one convener. During the January 11 and 12 party meeting in Delhi Shah discussed the strategy for the Lok Sabha polls.

It is generally realised that if the party loses even ten Lok Sabha seats in the May 2019 elections it will affect its chances of getting a majority. In view of this possibility the central leadership has decided to pay special attention not only to Madhya Pradesh but also to Chhattisgarh and Rajasthan.

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