CAG Reports Point Towards Corrupt Practices And Lack of Transparency
CAG Reports Point Towards Corrupt Practices And Lack of Transparency

The Comptroller and Auditor General of India (CAG) has come out with several audit reports which expose the fallacy behind the government’s tall claims of combating corruption. The audit reports on Ayushman Bharat (PMJAY), Bharatmala Pariyojana, and Economic and Services Ministries-Civil brought out instances of short spending on social welfare, dramatic cases of suspicious payments to beneficiaries, multiple cost overruns and financial irregularities, pointing towards myriad layers of corruption.   

Performance Audit Of Ayushman Bharat

The performance audit found that 7.87 crore beneficiaries were registered as on November 2022 under the scheme, constituting 73 percent of the targeted households of 10.74 crore. The scheme was supposed to mainly identify beneficiaries on the basis of the deprivation and occupational criteria of the Socio-Economic Caste Census, 2011 (SECC) for rural and urban areas. But as per National Health Authority (NHA) record, only 2.08 crore households had been identified from SECC-2011 database. This raises concerns regarding the identification of beneficiaries and the process adopted for the purpose. This concern gets further enhanced when one takes into account the audit observation that the match confidence score, which the online system of beneficiary registration generates based on matching the documents of a beneficiary with the SECC list of eligible beneficiaries, has been rendered ineffective as applications for registration were approved or rejected irrespective of the match confidence score.

The arbitrary way with which beneficiaries were identified will affect objectivity of the process, which in any welfare scheme of the government intended to serve the most downtrodden, is not a welcome scenario.

The audit also found out that in several states Empanelled Health Care Providers (EHCPs) associated with the scheme fail to meet the minimum criteria of support system and infrastructure and lack quality standards. The audit notes that there was a shortage of equipment and doctors, and several available equipment were found non-functional.

In the audit period, 3.57 crore claims amounting to Rs 42,433.57 crore were settled. Out of these, claims amounting to Rs 22,619.88 crore (53.30 per cent) pertained to the states with their own health insurance schemes which are sharing the data through API, where the transaction did not capture PMJAY identification of beneficiaries. Moreover, the audit revealed that there were large numbers of beneficiaries registered against the same or invalid mobile number. In one case it was found that 7,49,820 beneficiaries were linked with a single mobile number. It is surprising that in country where people have to go through Aadhaar based verification linked to individual mobile number, how  7,49,820 beneficiaries were registered using a single mobile number! This surely raises several questions.

The report also points out that in 2,25,827 cases amounting to about Rs 392 crore, claims were paid in cases where date of surgery was later than discharge of that patient. In 45,846 claims involving Rs 224 crore, the date of discharge was earlier than date of admission of these patients.

Bharatmala Pariyojna (BBP)

By 31 March 2023, 26,316 km of national highways had been awarded under BPP-I, which is 75.62 percent of the Cabinet Committee on Economic Affairs (CCEA) approved cost. The sanctioned cost was Rs 8,46,588 crore with Rs 32.17 crore/km as against CCEA approved Rs 15.37 crore/km. The sanctioned cost was doubled from the approved cost. In the case of Dwarka Expressway under the BBP-1 between Delhi to Gurugram, the expressway was built at a cost of Rs. 250.77 crore per kilometre against CCEA approved cost of Rs. 18.20 crore per kilometre, i.e., 14 times more than the sanctioned cost!

Furthermore, many BBP-1 projects were implemented without environmental clearance in contravention of guidelines. The audit report has also flagged the tendering process, with several bidders being selected based on falsified documents.

CAG on Finance Audit

The actual spending on social sector outlays has remained below the budget allocation in FY 2021-22 indicating that the government’s priority lies elsewhere. The actual expenditure of Department of Health and Family Welfare remained short by Rs 39,365 crore of budgeted numbers. Similarly for higher education, Rs. 27,754 crore remaining unspent which is 42.49% short of planned spending. For the Department of School Education and Literacy, this short-spending amounts to Rs 22,062 crore (21.88%). Rs 24,457 crore of the states’ share of taxes also remained unpaid in FY 2021-22.

Compliance Audit of Union Government

Deewan Housing Financial Corporation (DHFC) had attracted headlines for improper financial reasons some time back. The audit observes that Coal Mines Provident Fund Organization made an investment of Rs 1,390 crore during 2015 to 2018 in nonconvertible debentures in DHFC. The debentures amounting to Rs 864 crore had an early redemption clause, in case credit rating falls below AA- or lower. In spite of the fall in ratings since March 2019 and portfolio manager’s recommendation, the Coal Mines Provident Fund Organization failed to exercise this option resulting in avoidable loss to the tune of Rs 315.15 crore. Such blatant mismanagement of investment raises suspicions that a decision may have been made to benefit the promoter of Deewan Housing in an unfair way. This should be probed and appropriate action should be taken against those responsible for looting the hard earned money of workers.

The compliance audit further notes that Rs 8,800 crore was infused in SBI as additional capital without there being any demand. The Department of Financial Services (DFS) didn’t make an assessment of additional capital requirements by following the laid down criteria. It also put in money for recapitalizing PSBs even over what is laid out as cushion by RBI. This resulted in excess infusion of Rs 7,785 crore. This cushion of additional recapitalization from budget over and above RBI benchmarks would only encourage boards of PSBs to clean balance sheets of banks by write offs of bad and doubtful debts instead of focusing on recoveries. With Narendra Modi as Prime Minister, PSBs have written off a whopping Rs 14 lakh crore, naturally at the cost of ordinary depositors. The infusion of additional recapitalization above all benchmarks can only signal to bank managements that the government is comfortable with the policy of write-offs of bad corporate debts.

The CAG audit reports bring out in open the financial malpractices, lack of transparency, non-spending of funds allocated for social sector, favouring contractors and corporates in large infrastructure projects, compromises on federal character and using taxpayers to facilitate write-offs in Public Sector Banks.