CAG finds flaws in implementation of debt waiver scheme

Last Updated 14 January 2013, 15:42 IST

The government auditor CAG has found irregularities in disbursement of funds under the Rs 52,000-crore farm debt waiver scheme, 2008, as benefits have been taken by some ineligible farmers.

Taking note of the the Comptroller and Auditor General (CAG) Performance Audit of the Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS) 2008, RBI has asked the banks to recover money from ineligible beneficiaries.

It has also advised the banks to lodge FIRs in cases of tampering of records and fix responsibility for bank officials as well as auditors for providing undue benefits to farmers.
RBI said it was taking action on the advice of Finance Ministry and has asked banks to complete this exercise within a month.

Spotting discrepancies in the implementation of the debt waiver scheme, CAG said that ineligible accounts of farmers extended benefits under the scheme. The audit has noted that to provide benefit to ineligible farmers, instances of tampering and over-writing, inadequate documentation, etc. had taken place.

Benefit was only for farmers but in some cases loans extended to MFIs were claimed and disbursed, it said, adding inadequate benefits were extended to eligible accounts.

The audit has also found that banks did not issue Debt Waiver and Debt Relief Certificates and they also did not monitor outcome relating to fresh loans.

In 2008, the government had announced the scheme for waiving loans of about three crore farmers and giving partial relief to one crore more cultivators.

Under the scheme, marginal farmers cultivating crops in agricultural land of up to five acres got full debt waiver on their short-term crop loans. The scheme, which was for a limited period of 30 days, closed on June 30, 2008.

Other farmers having more than five acres of land, received a one-time settlement relief after the payment of a portion of the debt. The debt relief scheme ended in June 2010.

(Published 14 January 2013, 15:42 IST)

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