Union Govt Directly Transferred Thousands of Crores to Gujarat Agencies Since 2015: CAG

 

This amount which saw a hike of 350% since 2015 did not reflect in the Gujarat government's annual finance accounts.

Comptroller and Auditor General of India. 

 

New Delhi: Funds directly transferred by the Union government to various implementing agencies in Gujarat saw a 350% rise since 2015, Indian Express has reported, citing a report filed by the Comptroller and Auditor General of India.

The ‘State Finance Audit Report of the CAG for the year ended March 31, 2020’ was tabled on the floor of the Gujarat assembly on Tuesday, September 29, the last day of the two-day Monsoon Session. In it, the CAG noted that the amount was transferred directly by the Union government and did not reflect in the Gujarat government’s annual finance accounts, going against the 2014 decision of the Union government to release all assistance for centrally sponsored schemes and additional central assistance to the state governments.

The funds that the Union government sent were not routed through the state budget. “Thus, to that extent, the state’s receipts and expenditure as well as other fiscal variables and parameters derived from them, did not present the complete picture,” the CAG wrote in the report.

This direct transfer to Gujarat’s implementing agencies continued till 2019-20, seeing a 350% rise from Rs 2,542 crore in 2015-16 to Rs 11,659 crore in 2019-20.

The CAG report says funds of Rs 837 crore were given directly by the Union government to private sector companies in 2019-20. In the same period, private academic institutions received Rs 17 crore and trusts received Rs 79 crore. Registered societies and NGOs got Rs 18.35 crore and some individuals were given Rs 1.56 crore by the Union government.

Central and centre-state schemes that saw large transfers in 2019-20 were Pradhan Mantri Kisan Samman Nidhi (Rs 3,133 crore), the Metro-link Express for Gandhinagar and Ahmedabad (Rs 1,667 crore), the MGNREGS (Rs 593 crore), MPLADS (Rs 182 crore) and the Pradhan Mantri Matru Vandana Yojana (Rs 97 crore).

“Among the implementing agencies in Gujarat that received the the bulk of the funds directly from the Centre during 2019-20, included state government institutions (Rs 3,406 crore), state government PSUs (Rs 3,389 crore), central government institutions (Rs 1,826 crore) and government and autonomous registered societies (Rs 1,069 crore),” the Express report noted.

The CAG, in the report, also pointed out several flaws in the financial practices of the Gujarat government and suggested that the state formulate “realistic budgets based on reliable assumptions of the needs”.

“As per Gujarat Budget Manual-1983, no expenditure can be incurred under any Head without budget provision or in anticipation of a supplementary grant or appropriation…in two cases, expenditure in excess of Rs 1 crore was incurred (totalling Rs 11.07 crore) during 2019-20 without budget provision,” the CAG report said, according to PTI.

Expenditure without budget provision is a violation of financial regulations as well as “the will of the Legislature” and indicates “lack of financial discipline,” the CAG said.

This is not the first time that a connection between the Union government and Gujarat has explored loopholes and made news.

The ‘Gujarat model’ of economic growth, highlighted by the Narendra Modi government as a poll crux, had depended on incentives to corporates and expediting procedures to facilitate investment flows, Ahmedabad economist Indira Hirway had noted for The Wire in 2017.

While the long-term impact of such a model and whether it has indeed resulted in holistic growth are a matter of debate, that the growth strategy depended on inflow of money for fast infrastructure building was made clear in Hirway’s analysis. The role played by such directly transferred Union government funds in building perception of the state’s growth comes under the lens with the CAG report.

Ventilators for COVID-19 treatment ordered by the Union government from a Gujarat-based firm called Jyoti CNC Automation had not received a recommendation from a technical committee set up by the health ministry’s Directorate General of Health Services (DGHS), The Wire had reported.

Current and past promoters of Jyoti CNC Automation have had connections to top Bharatiya Janata Party (BJP) leaders. Some of the company’s past promoters include one business family linked to the controversial gift of an expensive suit to Prime Minister Narendra Modi.

SOURCE ; THE WIRE

 

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