FinMin rapped for slow recovery of money in scam

Parliamentary watchdog Public Accounts Committee (PAC) has reprimanded the Union Finance Ministry for failing to recover Rs 230.67 crore that disappeared due to irregularities in farm loan waver scheme that the United Progressive Alliance (UPA) I government had introduced in the run up to the 2009 Lok Sabha elections.

The PAC is peeved at the slow pace of attempts made to recover crores of rupees from illegal beneficiaries and lending institutions as only Rs 70 crore have been netted so far.

The government has recovered Rs 164 crore from the ICICI bank but, surprisingly, it is still to collect the quantum of interest and take regulatory action against the leading private bank. 

The benefits to farmers were extended through accounts  in various banks. In its draft report, the PAC headed by senior BJP MP Murli Manohar Joshi, has sought action against officials over why a private bank was at all allowed initially to accept reimbursement for loans given to micro financial institutions in violation of rules, said sources.  

The draft report on “Implementation of Agricultural Debt Waiver and Debt Relief Scheme, 2008” is based on a finding by Comptroller and Auditor General (CAG) that had unravelled the scam in the Rs 65,000-crore big-ticket social welfare programme. The PAC reports, after adopted by the members, will be presented in Parliament.

In February 2008, the UPA I government had announced a debt waiver and relief package for marginal and small farmers while a one-time relief of 25 percent of money taken from authorised lending institutions.  

The CAG had exposed the scam in the scheme in March, 2012, highlighting that ineligible farmers were showered with riches and the deserved ones were not considered, apart from the fact that records were tampered with for ulterior gains and loan reimbursed against guidelines.

The furious PAC is believed to have castigated the Department of Financial Services, asking it to reflect seriously on flagrant display of financial and administrative indiscipline that brewed scam and directed them to expedite the slow recovery and fix responsibility on the loot of tax payers’ money. The finance secretary accepted before the parliamentary panel about lapses committed at the level of banks and internal auditors who did not notice misappropriation of government funds.

Working on the CAG findings, the lending financial institutions traced 523 shady cases and recovered Rs 1.67 crore since they were illegally given to farmers. In another instance, excess benefits were extended in 601 cases and so far Rs 2.99 crore was recovered.

Interestingly the government has informed the committee that there were a group of farmers who got less than the desired amount to write off their loans. To compensate them, Rs 44 lakh was disbursed.  

During the verification of the loan waiver scheme carried out by banks, 581 more cases have surfaced where cash was wired to ineligible farmers. However, Rs 1.52 crore has been recovered from them.

As per the government action-taken report, irregularities were noticed in total 3,36,516 accounts involving about Rs 230 crore. The banks and financial institutions have merely taken disciplinary action in 3,679 cases while responsibilities have been fixed just in 449 instances.The government has also lodged five FIRs in 301 cases of tampering of records.