Commentary: What the ‘CAG Reports’ say about performance of various Govt Deptts in J&K

Arka Chakraborty and Kasturi Guha

The Comptroller and Auditor General of India (CAG) recently released reports on J&K finances, Public Sector Undertakings (PSUs) and non-Public Sector Undertakings (non-PSUs) which were placed in both Houses of the Parliament on September 23. The reports of the national accounting watchdog revealed the poor performance of various Government Departments in Jammu and Kashmir with regard to government schemes and public services including health, water supply, generations of rural employment, power development, transport and communication among others. These lapses on the part of the authorities have resulted in the stunting of the erstwhile state’s potential growth and greatly infringed the basic services enjoyed by a large section of the population.

Some of the major problems pointed out by the CAG reports are presented below:

Non-completion of projects under the NRDWP and the PMGSY programmes

The National Rural Drinking Water Programme is aimed at providing safe drinking water to the rural population on a sustainable basis. Against the aim of the completion of 1067 Water Supply Schemes (WSSs) in the period of 2013-2018, only 679 (64%) have been completed. Non-completion of 388 (36%) schemes has affected a population of 5.67 lakh. The year-wise short-fall in achieving targets of providing drinking water to government schools between 2013-2014 and 2016-2017 ranged between 10% and 29%. A delay between 7 to 67 days occurred in the transfer of funds amounting to Rs. 871.87 crore received during 2014-17 from State Finance Department to the State Water Sanitation Mission/Administrative Department. The interest of Rs. 1.74 crore earned during 2013-14 ti 2017-18 on programme and support funds was not accounted for. In 14 sampled divisions, 657 schemes estimated to cost 1415.37 crore were taken up for execution without the accord of Administrative Approval and Technical Sanction and an expenditure of Rs. 830.11 crore was incurred on these schemes. Against the required 7,66,326 water samples to be tested during 2013-18, only 5,60,331 (73%) were tested, and the break-up of bacteriological examination and chemical contamination was not available separately.

The Pradhan Mantri Gram Sadak Yojana (PMGSY) is aimed at connecting eligible unconnected rural habitations with all weather roads. Out of 1769 road projects under construction during 2013-18, only 810 (46%) have been completed as of March 2018. Problems in land acquisition and forest clearance have resulted in 467 road projects to connect 175 habitations sanctioned prior to April 2013 being incomplete. Planning for implementation of the PMGSY in J%K was deficient as District Rural Road Plans were neither prepared nor approved from intermediate levels like Panchayat and District Panchayat. Core Network did not cover all eligible habitations while inadmissible road projects and projects outside the Core Network were taken up for execution. Out of 2738 unconnected habitations as of April 2000, 1694 habitations (62%) were connected and 1044 (38%) habitations remained to be connected as of March 2018. In nine sampled districts, 254 road projects were sanctioned at a cost of Rs. 1031.35 crore and an on which an expenditure of 514.62 crore was incurred, were allotted at a cost of Rs. 935.96 crore without Administrative Approval and Technical Sanction.

Deficiencies in JKPDD’s power purchase planning, revenue collection  

The CAG reports have shown shortcomings in Jammu and Kashmir Power Development Department’s (JKPDD) power purchase planning, signing and operationalisation of power purchase agreements and revenue collection, apart from financial mismanagement and weakness in internal control. Against an expenditure of Rs. 24,299 crore on power purchase, only Rs. 9428 crore was realised as revenue from the sale of power during 2012-17, leaving a power purchase deficit of Rs. 14,871 crore. An extra expenditure of Rs. 840 crore was incurred due to planning deficiencies and non-optimisation of power purchase cost. The JKPDD also made an avoidable payment of 1420.26 crore on late payment surcharge, losing the opportunity to avail a rebate of Rs. 297.92 crore. Another avoidable payment of Rs. 543.47 crore was made towards idle capacity charges and energy charges. Poor collection efficiency resulted in recoverable revenue of Rs. 2508.23 crore ending March 2017. JKPDD’s failure to recover its power purchase cost resulted in foregone revenue of Rs. 10176 crore. The department’s failure to implement a revised tariff order resulted in the loss of Rs. 10.06 crore to the state exchequer. In case of water usage charges, out of the assessed 5950.55 crore in respect of 17 projects, only 3971.63 crore had been recovered. The revenue from water usage charges has not served the intended purpose of establishment and buying back of hydro-electric projects and for capital investment in transmission and distribution network for the J&K government.

Poor Health Sector

The CAG criticised J&K’s health sector for poor public service delivery and financial management. 102 ambulance services were shut off for three years in spite of receiving Rs. 3.18 crore. Delays in the finalization of rate contracts on the part of Jammu and Kashmir Medical Supplies Corporation Limited (JKMSC) resulted in delay or non-procurement of drugs, equipment, machinery and instruments. Liquidated damages of Rs. 7.92 crore for delayed supplies were not levied. Undue favour to a supplier was exhibited by rejecting seven bidders and procuring suture items at negotiated rates of Rs. 25.48 crore from the eighth bidder. Upgrading Government Medical Colleges under Pradhan Mantri Swasthya Suraksha Yojana was not achieveddue to the non-establishment of all super specialities. Some medical services that have been installed have not functioned, rendering expenditures of Rs. 8.57 crore unfruitful and Rs. 3.12 crore wasteful. Out of the 592 medical equipment procured from the two GMCs, 336 (57%) costing Rs. 40.97 crore were not traceable/non-available, not installed, non-functional or had got damaged in floods. Moreover, there is a lack of trained specialist doctors and nursing staff, paramedical staff and technicians in the super-specialty hospitals.

Failure in proper implementation of MGNREGA

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is a government initiative to ensure financial security for rural areas by guaranteeing 100 wage days of employment every financial year for every rural family whose adult family members are willing to do manual labour. CAG has revealed a number of inconsistencies in MNREGA in J&K during 2016-17 reflecting poor financial management that has cost an amount equivalent of 83.78 lakh person days of employment. No unemployment allowances were paid to job card holders who demanded employment but could not be provided the same. As against 33% person days of employment, only 19% could be provided to woman beneficiaries. 77% wage payments were made after the prescribed 15 days, while 40% wage payments were made after a delay of more than 90 days. While 14211 works under the approved annual action plans were not taken up, 2281 unapproved works were executed, leading to the unauthorised expenditure of Rs. 32.67 crore . Non-maintenance of wage material ratio led to excess expenditure of Rs. 277.69 crore which was equivalent to 1.74 crore person days employment. All this was accompanied by the non-accounting and non-utilization of excess material, delay in completion of works and, above all, poor monitoring.

Failure in implementing NeGP and NAP

The National e-Governance Plan (NeGP) is aimed at making all local services accessible to the common man. The CAG revealed that this programme in J&K has run into a number of administrative and financial problems. Out of an approved Rs. 212.10 crore to be used to implement six schemes of the Information Technology Department under the NeGP,  only Rs. 60.38 crore (28%) was released by the Centre,  the rest not being received due to the non-confirmation to the GoI regarding the contribution of 20% State share. Fund utilization during 2012-17 remained only 41% as of 31 March,  2017.  Due to financial mismanagement, full connectivity under State Wide Area Network (SWAN) could not be provided, resulting in the non-utilisation of the complete potential of State Data Centre and jeopardized work on State Service Delivery Gateway.

The National Afforestation Programme (NAP) in Jammu and Kashmir was mostly compromised due to the incompetence of the state forest development agency since its inception (July, 2010). The overall forest cover of J&K was decreased from 16.09% to 15.78% during 2009-2015. Against the ideal 66% forest cover in hill areas, J&K’s hills had only 24.02% of their area under forest and tree cover. Seven forest development agencies could not be brought under the ambit of NAP. Funds received from the Centre were allocated disproportionately to various forest development agencies, with 15 FDAs receiving only Rs. 1.80 crore (2013-14) while 9 FDAs received Rs. 9.23 crore. Neither five year Perspective Plan not Annual Plan of Operations was prepared by the FDAs. No entry point activities were organized by the 11 FDAs test-checked in Audit in spite of Rs. 1.03 crore being granted to 10 of them for this purpose. None of these FDAs had organized any training or capacity building programme for skill development. Non-maintenance of plantation journals and non-preparation of Annual Reports by the state forest development agency has led to an array of problems. The Governing Body met only once against seven times (April 2014) whereas the Executive Body met only five times against 27 times during 2010-16.

Failure of JKPCC to finalize accounts

The Jammu and Kashmir Project Construction (JKPCC) Limited was incorporated in order to execute construction works for the state and central governments and PSUs,  carry on the business of builders,  contractors,  engineers,  architects,  surveyors,  estimators and designers in J&K and curb the monopoly of private contractors to provide healthy competition between private and public sectors. However, the JKPCC has created numerous problems for itself. The last accounts finalisation was done in 2010-11. After that, the value of works has decreased from Rs. 364.19 crore in 2012-13 to Rs. 250.65 crore during 2016-17. Losses of Rs. 3.95 crore and Rs. 11.69 crore were suffered during 2014-15 and 2015-16 respectively. Shortfalls in achievements of value of works remained between 29% and 50%. The company was dependent on state departments and agencies for works on nomination basis and did not get any work on competitive tender basis. Delay in the work completion led to a cost increase of Rs. 360.87 crore. Absence of any clear recruitment and promotion policy,  absence of any mechanism for ensuring continuous monitoring and internal control,  weak quality control, the inadequacy of internal audit and variations amongst performance reports were others among the company’s many problems.

The CAG’s reports have only confirmed the people’s fears regarding the problems in the execution of various government schemes, be it health, power development, forest development or programmes under PMGSY, NRDWP and so on. These have revealed the administrative delays in work executions which leads to a massive waste of funds and resources that, if managed properly, could be used to provide basic services to lakhs of people in the region. The Lt. Governor’s administration must take a leaf from the CAG’s findings to amplify the performance of its numerous departments and ensure the creation of a productive work culture in the Union Territory.