CAG unveils 8216;fraud8217; in the UPA govt8217;s Rs 52,000 cr farm debt waiver scheme

8220;Overall,the Performance Audit revealed that in 8230;22.32 per cent of cases test checked there were lapses/errors which raised serious concern about the implementation of the scheme8221;,said the CAG report tabled in Parliament today.

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 8220;farmers who had taken loan for non-agricultural purposes or whose loans did not meet eligibility conditions,were given benefits under the scheme.8221;

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 8220;stringent action8221; 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 8220;the lending institutions had not obtained acknowledgement from the farmer8221;.

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.

8220;Follow-up action in response to complaints or inspections should be properly monitored,8221; 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.

8220;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,8221; 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 8220;yet they did not take adequate measures to rectify the same in timely manner8221;.

Over the last four financial years,the government has waived more than Rs 52,000 crore debt related to about 3.45 crore farmers.

Farm loan waiver a 8216;massive scam8217;: BJP

Citing the CAG report on farm loan waiver,BJP today alleged that a fresh scam of over Rs 10,000 crore has surfaced in the implementation of the scheme and demanded a CBI probe to book the culprits.

According to the CAG report,nearly 34 lakh eligible farmers were denied their right to debt waiver and more than 24 lakh ineligible beneficiaries have gained through this massive scam,BJP spokesperson Prakash Javadekar told reporters here.

The CAG report is an eye opener and the BJP demands immediate CBI inquiry to unearth the real extent of the scam, he said.

The party also demanded that all the eligible farmers should be given the loan waiver benefits taking into account the outstanding as of March 31,2013.

Javadekar noted that CAG has till now only checked 90,000 accounts out of 3.5 cr accounts.

Even with this small sampling,the CAG has found out that 13 per cent eligible farmers were not considered by the lending institutions while preparing list of eligible farmers. Moreover,8.5 per cent of ineligible beneficiaries got undue windfall profit, Javadekar said.

BJP charged that the Congress has become synonymous with corruption as yet another scam has now come to light after the Commonwealth Games,2G Spectrum,Coal and the VVIP chopper scams.

We demand that the inquiry must fix the responsibility and action must be taken against the guilty, he said,adding that the Swaminathan Commission formula of calculating remunerative prices- which is cost of production plus 50 per cent 8211; be accepted.