A Parliamentary committee has asked market regulator Sebi to do 'proper advance planning' before any new scheme,so that investors' money is not wasted on programmes that are launched in haste and abandoned later. In a report tabled in Parliament,the Public Accounts Committee (PAC) has said it had drawn attention of the Ministry of Finance on an eventual suspension of the much-hyped Market Participant Identification Number (MAPIN) scheme,wherein Rs 300 each was collected from 3.84 lakh investors. The suspension of this scheme led to "a wasteful expenditure of Rs 11.54 crore collected from 3.84 lakh investors and the benefit of the scheme did not accrue either to Sebi or the stakeholders," the PAC had told the Ministry. The Ministry in its Action Taken Notes (ATNs) replied there was no malafide intention in the scheme and no loss was incurred by Sebi or the government. The PAC,however,said it is not convinced by the reply and it reiterates that "the MAPIN was conceived and implemented in haste for which it had to be abandoned mid-way defeating the very purpose. "The Ministry's contention that there was no loss to Sebi or Government of India does not hold good in view of the fact that the collection of Rs 11.54 crore from 3.84 lakh investors did not serve the intended objective. "The Committee,therefore,desire that whenever such schemes are intended to be introduced by Sebi,there should be proper advance planning and larger consultations with the stakeholders before awarding the contracts,so that the bonafide purpose of checking irregularities and deficiencies in the stock market operations is well served," it said. In July 2009,the Comptroller and Auditor General of India had also slammed SEBI for awarding the database preparation work related to MAPIN to NSDL which resulted in "unfruitful expenditure" of Rs 11.54 crore of investors' money. The ministry had said in its ATNs that the exercise was undertaken for the first time in the country and there was no benchmark to be followed. The ministry further said it was informed by Sebi that "there were not malafides in the decision. Further,the implementing agency NSDL had done its job by providing registration as required,therefore it had done its part. "However,as the project was abandoned midway,the registrations were of no use. There was no loss to Sebi or Government of India. The amount of Rs 300 per registration was collected from around 3.84 lakh investors and given to NSDL,which was registering,servicing and maintaining the database," the Ministry said. The PAC report further said that it has found certain other shortcomings and deficiencies as well on the part of the Finance Ministry (Department of Economic Affairs),including those related to pendency of remedial monitoring by the Ministry in timely disposal of ATNs by various departments. "The committee takes due note of the various measures initiated by the Department to eliminate delays/discrepancies in the submission of remedial/corrective ATNs on the non-selected Audit Paras," the PAC said. However,it expressed dis-satisfaction over reasons like delay in finalisation of guidelines,requirement by Audit to prepare consolidated ATNs and asked the Ministry to take measures so that such routine matters do not impede or delay the finalisation of ATNs. "Now that the Ministry has accepted the Committee's recommendation for quarterly review of the pending ATNs at the level of Secretary/Minister,the Committee trust that the Ministry would display a marked improvement in the finalisation of pending ATNs in the near future," it said. "Since 643 audit paras are still pending with various Departments of MoF,it is imperative for the Finance Ministry to take requisite urgent action to expeditiously settle them and set an example for other Ministries/Departments to emulate," the PAC said.
