The country?s supreme auditor has finally woken up to the question of why farmers? incomes stay low despite high food prices. Given that the country?s subsidy bill on fertilisers had gone beyond its defence budget in 2008-09, the Comptroller and Auditor General (CAG) of India has initiated an unprecedented performance audit of the fertiliser subsidy regime. It has also begun an audit of the government?s flagship irrigation scheme?the Accelerated Irrigation Benefit Programme (AIBP)?as part of its efforts to understand leakages in the flow of development funds to the rural economy.
The rationale behind conducting performance audits in these two sectors is to check whether the benefits of the schemes are reaching their actual beneficiaries?the farmers. ?The last few months have seen an unprecedented rise in food prices at the retail level, while the condition of the farmers largely remains the same. Therefore, the CAG wants to know whether these large, expensive programmes are benefiting them?whether they actually receive fertilisers at subsidised rates and what is the progress under the AIGP,? an official with the CAG?s office explained.
The other objective is to ensure that the huge funds provided to these sectors are being fully utilised and not diverted. ?With the quantum of funds involved in these two programmes, it is essential that they are audited,? he said. ?For instance, in 2008-09 the fertiliser subsidy was almost Rs 1 lakh crore, which is about the same as the budget for two to three states,? he pointed out.
The CAG?s concerns stem from its findings from a recent performance audit of the National Rural Health Mission (NRHM)?another flagship programme of the UPA. The CAG found serious lapses in its implementation, including unspent funds and inadequate data. For instance, according to the CAG report, during 2005-08, the government had made a budget provision of Rs 27,079 crore for NRHM but only Rs 24,151 crore was actually spent.
The Centre, in the last three years, has spent over Rs 1,50,000 crore on fertiliser subsidy. From Rs 43,319.16 crore in 2007-08, allocations for fertiliser subsidies touched an unprecedented Rs 99,494.71 crore in 2008-09. Till November 2009-10, the Centre has spent Rs 44,270.83 crore on footing this bill.
Similarly, under the AIBP, a centrally-sponsored scheme of the ministry of water resources, the Centre provides assistance to irrigation projects as an incentive to the states for creating irrigation infrastructure in the country. The scheme has been given huge allocations, such as Rs 20,000 crore with a grant component of Rs 5,500 crore in 2008-09.
The AIBP was last audited by the CAG in 2004, but the fertiliser subsidy has never been put under the scanner. The audits are expected to be completed by the next month and their findings will be tabled in Parliament in the Budget session, a senior official with the CAG said.