A major portion of funds released by the Centre for the benefit of handloom weavers in Jammu & Kashmir was diverted to pay salaries and wages to the staff of Jammu & Kashmir Handloom Development Corporation Ltd.
In fact, the corporation even submitted certificates to the Centre showing full utilisation of the central component of Rs 85.88 lakh, without mentioning the diversion, according to the Comptroller and Auditor General?s report on J&K for 2006-07.
Pulling up the corporation, the CAG report said due to misutilisation of government funds by the corporation, the benefits could not be passed on to the targeted handloom weavers. What?s worse, a liability of Rs 37.50 lakh was created by the company towards outstanding loan payable to the Centre.
The company got Rs 1.41 crore from the Centre and the state in 2002-03 for implementation of the ?Project Package Scheme for Handloom Weavers?, which aimed at covering 750 weavers, of which 375 were to be given new looms and the looms of another 375 were to be modernised. The Rs 1.41 crore project cost was to be shared by the Centre (Rs 85,88 lakh) and state (Rs 55.40 lakh).
Pointing at the gaping holes in the implementation of the scheme, the CAG report said ??no loom was actually installed or modernised….and none of the activities under the scheme had been carried out.??
The audit findings were confirmed in July 2006 by the state director, audit and inspections, whose report admitted that ??misappropriation of government money had taken place on a large scale and that the company had submitted incorrect utilisation certificates to the central government,?? says the CAG report.
Handloom weavers in J&K play a crucial role in preserving traditional craft and are key contributers to the country?s foreign exchange earnings. The handloom sector involves 51,847 weavers with 18,154 units spread across J&K.