Norms flouted for electricity concessions to private firms in Mumbai

Between August and September last year, the Maharashtra energy department issued orders sanctioning refunds on electricity duty payments in 38 cases.

Written by Sandeep A Ashar | Mumbai | Published:March 5, 2016 4:48 am

The state finance department has objected to granting of concessions on electricity duty to a host of companies in various sectors by the BJP-led government, saying that proper procedure was not followed.

Between August and September last year, the Maharashtra energy department issued orders sanctioning refunds on electricity duty payments in 38 cases. Those who benefited from the concession included a prominent chain of cinema halls, seven technology majors, three powerloom companies and eight politically connected educational institutes. The state government charges electricity duty on power consumption, which is collected by distribution companies for the government. The rates at which the duty is levied varies depending on what the premises are used for. There is a set procedure by which the government allows refund of electricity duty to those found eligible for the concession.

The Indian Express has accessed official documents in which the finance department has alleged that these 38 cases saw refunds of the duty sanctioned without following the due process of law. “The cases were sanctioned without a proper scrutiny of records. Norms that are in place for allowing remission or refund were overlooked,” the finance department has said in its objection on the official file.

It is mandatory to trace the challan used for payment of the electricity duty before approving a refund case to avoid erroneous or dubious claims. Further, rules state that the eligibility of the claimant must to be verified. But the finance department note states that this was not done in these 38 cases. The department has listed some more violations of the Maharashtra Financial Rules and the Maharashtra Treasury Rules.

The energy department issued the orders after a committee under the department’s deputy secretary (energy) BS Mandve approved these cases in July last year. Sources said the irregularities came to light after an inspection of the beneficiaries’ premises revealed that there were several cases where the refund was not justified. The energy department and the committee under Mandve had previously courted controversy for violation of norms while approving an electricity duty waiver allegedly worth Rs 572 crore to a steel major, which was also issued last August. The Maharashtra government was forced to withdraw this order after the Congress targeted it over irregularities.

The committee was later disbanded. But the finance department has again pinned the blame on Mandve and the committee for lapses while approving these 38 cases. “The committee overlooked the norms deliberately. The government was put to a loss of Rs 5.38 crore and undue concessions were extended to private firms. The government must initiate action against the committee members. The loss to the public exchequer must be recovered from them,” the finance note states.

The Indian Express is in possession of a December 3, 2015 communication by Maharashtra’s Chief Electrical Inspector (in charge) Suresh Bagde, who was a member of the erstwhile committee, where he has said that he had objected to the violation of norms and procedures during the committee’s meeting but his dissent was ignored. The communication is addressed to Principal Secretary (industries) Mukesh Khullar.

The finance department has objected to not being consulted. Senior officials also said that when the department sought a clarification from the energy department on how the applications were processed, the latter failed to produce any original documentary evidence on the basis of which the approvals were granted. Even the minutes of the meeting were not recorded, senior officials claimed.

Mandve, when contacted, conceded that the committee hadn’t verified the eligibility and veracity of the applicants but said that these had been given on the basis of certifications issued by power discoms. “All procedures that were laid down for the committee were followed. An undertaking was also taken from the applicants that the amount would be recovered if the refund claim was found to be erroneous,” he said. But the finance department has ruled that the energy department had not given any satisfactory explanation on why set norms were not followed. Bagde, when contacted regarding the irregularities and the objections raised by the finance department, said, “It is a matter handled at the Mantralaya level.” Mukesh Khullar said he had no knowledge about the objections raised by the finance department.

The government has projected an earning of Rs 7150 crore through electricity duty in 2016-17. It has so far collected Rs 6701 crore.

Earlier, the CAG had come down heavily on the state government in 2007 and 2013 for irregularities in grant of refunds. In 2013, then Congress, NCP government transferred approval powers to the discoms. But the decision was reversed in February 2015 after the CAG observed that it was not in line with rules.

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