The Comptroller and Auditor General (CAG) has uncovered irregularities in financial management by the Andhra Pradesh government, this time in particular reference to the State Development Corporation.
A recent letter by the Principal Accountant General (Accounts and Entitlement) Lata Mallikarjuna to the state Principal Finance Secretary (PFS) S.S. Rawat, exposed irregular transactions to the tune of Rs.18,241 crore.
“I wish to bring your attention to off-budget borrowing by the statutory AP State Development Corporation. During review of transactions, some lapses in bills and challans were observed by my office,” the PAG pointed out in her letter and sought a detailed explanation from the PFS.
“An amount of Rs 10,895.67 crore was drawn (through three separate bills) from the PD (personal deposit) Account (of SDC) without any details,” the PAG pointed out. Further, an amount of Rs. 6,223.41 crore was transferred to 63 various PD administrators for onward payment towards the ‘Amma Vodi’ scheme.
‘Amma Vodi’ is one of the many freebie schemes being implemented by the Jagan Mohan Reddy government under which an annual dole of Rs 14,000 each is given away to mothers for sending their children to school.
The PAG wanted to know the authority (code provision) under which the transfers were made. Another irregularity that left the PAG baffled was the “self-drawl” of Rs 227.42 crore through two different bills. The SDC gave no details related to the sanction of the amounts (Rs 89.44 crore and Rs. 137.98 crore) or the expenditure involved. The PAG sought an explanation on this.
On the receipt side of the SDC’s PD account, the PAG noted that Rs 222 crore was deducted through two challans from receipts stated to have lapsed. “On verification of challans, no details are available but for a blank bill appended to it,” Mallikarjuna pointed out.
Another Rs 672.58 crore was “lapsed” via a bill, though it pertained to capital infusion of Rs 900 crore. The PAG sought complete details like the sanction order, proceedings and workflow.
The PAG’s letter comes close on the heels of another letter from the Union Finance Ministry stating that the APSDC Act, 2020, appeared to be violating the provisions of Article 293 (3) of the Constitution.
Stuck in financial troubles, the YSR Congress government floated the SDC last year and made it a statutory body through legislation. Though the SDC’s objectives are many, it is essentially meant to borrow more money for three main freebie schemes that would cost Rs. 16,899 crore in the current financial year. It has so far borrowed Rs. 21,500 crore from different banks by pledging the revenue from liquor sale and other taxes.
“Prima facie, the pledging of future tax revenues appears to be not in consonance with Article 266 (1) of the Constitution. Further, some of the provisions of the APSDC Act appear to be violating the provisions of Article 293 (3) of the Constitution,” the Department of Expenditure under the Union Finance Ministry told the state government in July this year.
State Finance Minister Buggana Rajendranath, PFS Rawat and other top officials, including the Advocate General, have been doing rounds of the Union Finance Ministry for the past few weeks, pleading that nothing is amiss with the SDC and everything is being done as per the book. The SDC issue is now before the state High Court that is hearing a public interest litigation.