CAG report points flaws in Gujarat investment model | The Financial Express

CAG report points flaws in Gujarat investment model

THE Comptroller and Auditor General (CAG) of India Report-2015, tabled in the state legislature on Thursday, has pointed out flaws in the ‘Gujarat model’, especially within the state public sector units (SPUs).

THE Comptroller and Auditor General (CAG) of India Report-2015, tabled in the state legislature on Thursday, has pointed out flaws in the ‘Gujarat model’, especially within the state public sector units (SPUs).

Despite investing a hefty sum of R62,929 crore in statutory corporations, government companies, rural banks, joint stock companies, cooperative institutions and local bodies, the Gujarat government received only R90 crore as dividend from PSUs in the financial year 2014-15. The average return on these investments was 0.28% in the last five years, while the government paid 7.65% as interest on its borrowings during the same period.

Of 68 working SPUs in Gujarat, 49 earned profit amounting to R3,725.62 crore while 13 SPUs incurred losses worth R613.17 crore during the year 2014-15.

The CAG report lists Gujarat State Petronet Limited, Gujarat Gas Limited and Gujarat Mineral Development Corporation as the major contributors to the profits, while Gujarat State Road Transport Corporation, Gujarat State Energy Generation Limited and Gujarat State Financial Corporation have been mentioned as the major loss-making PSUs.

Borrowings by Gujarat State Petroleum Corporation Limited (GSPCL) in 2015 increased by 177%, mainly for activities in KG block. The company’s borrowings in 2015 amounted to R19,716.27 crore, as opposed to 2011 when its borrowings had been R7,126.67 crore. GSPCL also suffered outstanding dues worth R2,329.52 crore from joint venture (JV) partners. Its total interest burden has increased to R1,804.06 crore from R981.71 crore in 2011-12.

The CAG report also points out at expenditures incurred by the Metro Link Express for Gandhinagar and Ahmedabad Company Limited under the earlier phase which has since been scrapped. Development of Indroda, Motera and Chiloda sites have resulted in infructuous expenditure of R373.62 crore.

The CAG report has brought forth non-submission of utilisation certificates of R8,160.78 crore by autonomous bodies, indicating lack of monitoring by departments in utilisation of grants given for specific purposes.

The report noted pendency in submission of detailed contingent bills against large amounts drawn on abstract contingent bills amounting to R582.52 crore by the departmental authorities. The report slammed departments’ lack of efforts to make good its losses and fix responsibility, after 147 outstanding cases of misappropriations, losses along with non-recovery of amounts. The agriculture sector also appears to have faced neglect from the state government.

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First published on: 01-04-2016 at 00:11 IST