Gross violation of procedure in various J&K Departments: CAG

Greater Kashmir

The Comptroller and Auditor General (CAG) has revealed gross violations in medicine, horticulture, cement and power development sectors in the erstwhile state of Jammu and Kashmir.

The audit report, tabled in Parliament on Wednesday, reveals delays in finalisation of rate contracts and consequent delay/non-procurement of medicines/ drugs, instruments, machinery, equipment; thereby defeating the purpose of creation of the company.

The audit also came across instances of non-levy of liquidated damages of Rs 7.92 crore for delayed supplies, undue favour to a supplier by rejecting seven bidders and procuringitems at negotiated rates for Rs 25.48 crore from the eighth bidder, non- operationalisation of 102 Ambulance Service in the state over a period of more than three years despite receiving the fund of Rs 3.18 crore and non-observance of prescribed procedure for empanelment of testing laboratories leading to extra expenditure of Rs 9.47 lakh etc.

In the horticultural sector, the audit report cites rejection of apple juice concentrate by the buyer as not being of acceptable quality and subsequent reduction in prices, resulting in a loss of Rs 7.93 lakh, besides blocking of capital of Rs 2.03 crore on account of unsold stock, for the Jammu and Kashmir Horticultural Produce Marketing and Processing Corporation Ltd.

Also, the failure of Jammu and Kashmir Cements Ltd to utilise the cement grinding-cum-packing unit at Samba to the optimum capacity, as well as market the cement produced to private parties/government departments, resulted in operating loss of Rs 1.26 crore during 2015-18, it said.

The report also cited the failure of the Industries and Commerce Department to take timely action for setting up of International Trade Centre (ITC) at Pampore, resulting in blocking of Rs 3.94 crore for around ten years. Besides, the expenditure of Rs 1.06 crore incurred on fencing of land and payment of registration fee was rendered unfruitful and the state could not avail the benefits from envisaged facility for holding national/international trade fairs, buyer/seller meets, transaction of international business as well as the interface with the overseas markets, it said.

Meanwhile, improper planning of the Jammu and Kashmir State Overseas Employment Corporation Ltd, to set up its office at New Delhi without any meaningful activity, resulted in unproductive expenditure of Rs 47.86 lakh on salary of staff, hiring of premises and other expenses.

Then, the failure of Jammu and Kashmir State Power Development Corporation Ltd to deposit the advance tax on taxable income during the assessment year 2015-16, in accordance with the provisions of the Income Tax Act, 1961 resulted in avoidable interest payment of Rs 3.26 crore, the CAG report said.

“Lax supervision and control in Jammu and Kashmir State Power Development Corporation Ltd over the execution of contract for design, engineering and commissioning of 48 MW Lower Kalnai Hydel Electric Project led to unfruitful expenditure of Rs 25.30 crore. Company could not generate 219.30 Million Units of energy per annum and had to pay an interest of Rs 17.49 crore on the term loan availed for the project. “The company also failed to sequence the payment of consultancy fee with the progress of the contract which led to avoidable expenditure of Rs 6.57 crore. Despite encashment of bank/performance guarantee of Rs 79.20 crore, the company suffered a minimum loss of Rs 11.20 crore,” the report says.