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CAG: State misused funds for medical college upgrade, increasing PG intake

Pointing out instances of irregular diversion of funds, expenditure on inadmissible items and blockage of funds, the CAG has blamed the state government’s “lack of effective monitoring” for the lapse.

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FUNDS MEANT to upgrade state-run medical colleges and enhance their intake capacity for post graduate (PG) courses were “misused” in Maharashtra, a report by the Comptroller and Auditor General (CAG) of India has found. In its audit objections, the country’s top auditor has also slammed the state government for “diversion of funds” and “irregular expenditure”.

Eleven of the 21 state-run government medical colleges (GMCs) are benefactors of an ongoing centrally sponsored financial assistance scheme for “strengthening and upgradation of GMCs” for increasing the intake capacity and infrastructure for PG courses. The scheme, implemented by the Union Ministry of Health and Family Welfare, is ongoing since 2012.

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The CAG report states that till March 2019, the government had released Rs 195 crore under the scheme, of which the beneficiary colleges had already spent Rs 177 crore. But while the intended target was to add another 692 PG seats, the auditor found only 79 seats were created.

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“Seven years after the scheme’s launch and after spending 91 per cent of the released funds, the GMCs could add only 11 per cent of the targeted PG seats. As against the target of increasing 409 seats in the existing courses, only seven seats (fewer than 2 per cent) was achieved, while only 72 seats (25 per cent) were created as against a target of creating 283 seats in new courses,” the CAG report observed.

It added, “Due to the poor implementation of the scheme, the objective of upgrading the PG teaching facilities, increasing the intake capacity of post graduate courses, introducing new and higher courses and mitigating the shortage of specialists in the country could not be achieved.”

Pointing out instances of irregular diversion of funds, expenditure on inadmissible items and blockage of funds, the CAG has blamed the state government’s “lack of effective monitoring” for the lapse.


The performance audit involved works carried out during the Congress-led and BJP-led regimes between 2012 and 2019.

The GMCs involved in the scheme’s implementation included those in Akola, Ambejogai, Dhule, Latur, Miraj, Nagpur, Pune, Nanded, Solapur Yavatmal, and Aurangabad.

The CAG has observed that the colleges had transferred a total of Rs 35 crore of the released funds to state-run Haffkine Bio Pharmaceutical Corporation Limited for procurement of 200 medical equipment between 2017 and 2019, but till date the latter has procured barely 24 out of these, spending just Rs 5.75 crore.


“This has resulted in the blockage of Rs 29.28 crore defeating the scheme’s objective,” the CAG has stated.

Accepting the objection, state’s Directorate of Medical Education and Research (DMER) said “necessary instructions will be obtained for timely procurement of the equipment”.

The CAG has further found that funds meant for newly filing up 157 faculty positions for the upgrade were misutilised, with six GMCs even diverting these funds for other uses. “Apart from GMC Pune, none of the beneficiary colleges spent any amount released under the faculty component of the scheme, which resulted in the non-approval of the courses,” the report said.

The DMER has also accepted this diversion and said “instructions for adjusting the diverted amount will be issued”.

Eight out of the 11 colleges were found to have spent another Rs 21 crore on items that were not admissible under the scheme, which resulted in non-creation of 138 PG seats. While the government has contended that this was owing to the change in the Medical Council of India’s guidelines, the auditor has shot down this justification pointing out that “no prior approval of the Union ministry was sought for the deviation”.


The CAG has further pointed to instances of delayed completion of infrastructure works, late release of the state’s matching grant for the scheme and not carrying out of gap analysis as mandated. Funds totalling Rs 18 crore sanctioned to GMC Miraj for infrastructure works were irregularly diverted, it has observed.

With the Centre launching the second leg of the scheme in 2018 and the colleges in question continuing to receive funds, the CAG has recommended that the “government should direct the DMER to expedite the purchase of equipment and the process of procurement”.


It has also asked the state to draw up detailed action plan and the release of funds in a timely manner.

First published on: 14-09-2020 at 01:53 IST
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