CAG: Rs 52,000-cr farm debt waiver scheme contentious
Implementation of Rs 52,000-crore farm debt waiver scheme,
government auditor CAG on Tuesday said in several cases ineligible
farmers were given benefit while deserving ones were left out.
Comptroller and Auditor General (CAG) has also found instances of
tampering of records and pulled up the Department of Financial Services
(DFS) in the Finance Ministry for deficient monitoring of the
multi-crore scheme. “Overall, the Performance Audit revealed that in
…(22.32 per cent of cases test checked) there were lapses/errors which
raised serious concern about the implementation of the scheme”, said the
CAG report tabled in Parliament on Tuesday. The report deals with
Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS) 2008 under
which 3.69 crore small and marginal farmers and 60 lakh other farmers
were given debt relief to the extent of Rs 52,516 crore. The CAG report
said in several cases “farmers who had taken loan for non-agricultural
purposes or whose loans did not meet eligibility conditions, were given
benefits under the scheme.” It said several farmers who were eligible
for the benefit under the scheme were not considered for loan waiver by
the lending institutions. Besides other observations, the report said
the Micro Finance Institutions (MFIs) were given benefit under the
scheme in violation of the debt waiver guidelines. The banks, it said,
also claimed undue benefits like penal interest, legal charges,
miscellaneous charges from the government. Under the scheme, banks were
supposed to bear these charges themselves. Referring to the issue
tampering of records, CAG suggested DFS should review such cases and
take “stringent action” against erring officials and banks. After
extending benefit under the scheme, the banks were required to issue a
certificate and obtain an acknowledgement from the farmer for the same.
However, the CAG report found that in several cases “the lending
institutions had not obtained acknowledgement from the farmer”.
Subsequent to the issue of draft audit report to the Finance Ministry
and exit conference, the DFS had advised the RBI and NABARD, the nodal
agencies for implementation of the scheme, in January requesting them to
issue instructions to lending institutions for taking immediate
corrective measures in respect of audit observations. The DFS instructed
that institutions need to take action like recovery of money paid to
ineligible beneficiaries and loans extended to MFIs, action against
erring banks, fixing responsibility of bank officials as well as bank
auditors. The CAG has recommended that the Ministry, on its own part,
may verify high-value claims of re-reimbursement, high-risk areas like
inadmissible charges and at least sample claims of lending institutions
to ensure that the financial interest of the government is protected.
“Follow-up action in response to complaints or inspections should be
properly monitored,” the report added. Referring to the monitoring
aspects, CAG report said the nodal agencies themselves were relying on
certificates and data of lending institutions without conducting
independent cross checks. “This raises the issue of conflict of
interest, since in effect, the lending institutions were performing a
dual role, first implementing and then monitoring their own work,” the
report said. The report said the audit observed that DFS and nodal
agencies were aware of numerous flaws in the implementation of the
scheme “yet they did not take adequate measures to rectify the same in
timely manner”. Over the last four financial years, the government has
waived more than Rs 52,000 crore debts related to about 3.45 crore
farmers.
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