CAG Audits in West Bengal Reveal Financial Irregularities, Corruption

In the war of words with the Mamata Banerjee-led Trinamool Congress (TMC) government over several issues, then-West Bengal (WB) governor Jagdeep Dhankar had alleged that

there had been no audit by the Comptroller and Auditor General (CAG) in West Bengal in the last 10 years.

Dhankar’s statement is not based on facts. The principal accountant general (PAG) of WB has been submitting reports on the health of the state’s finances and economic, general and social issues every year to the governor, who laid them before the Assembly, as required under Article 151 of the Constitution.

At the same time, it is true that the PAG could not audit the state’s flagship social programmes—Sabuj Sathi, Khadya Suraksha/Khadya Sathi, Swasthya Sathi, MGNREGS, IAY/PMAY, SJDA, Uttarkanya, TMC meetings in districts in the name of administrative meetings at the state exchequer’s costs, full/half-page ads in newspapers every time the chief minister visits districts for such meetings, grants to 40,000 puja committees, BGBS and Kanyashri.

Whatever audits have been done so far revealed financial irregularities, inefficiency in the planning and execution of programmes and large-scale corruption. Under the Geetanjali Housing Scheme, which aimed to provide 25 sq m houses to BPL families, the TMC government could complete only 1,81,826 units against the target of 2,18,709 between 2011 and 2016.

The programme was fraught with wrong selection of beneficiaries, providing less carpet area, making extra payments to contractors by way of allowing higher rates and parking large amounts in deposit accounts of district magistrates, and discrepancies in reports.

In her 2022-23 Budget Speech, state finance minister and former urban development minister Chandrima Bhattacharya claimed that 47.34 lakh housing units had been constructed under Banglar Bari scheme till 2021. Interestingly, there was no Budget provision for the number of units claimed to have been constructed.

Subsequently, the TMC government asked Panchayats to remove the Banglar Bari placards on houses constructed with IAY/PMAY funds following a recent investigation by a Central team. Audit reports revealed that such tall claims were not based on facts.

Funds spent on projects which were supposed to have benefitted people at large have been wasted due to the lack of planning. For example, under the Pathasathi project, 51 motels were supposed to have been constructed by the PWD and another 18 by the housing department by March 2017 without planning as to who will manage them.

The initial idea of handing over the motels to the tourism and youth services department did not materialise due to the lack of funds. In its March 2016 report, the CAG observed that motels constructed by the housing department at a cost of Rs 27.41crore were lying unused.

Inefficient planning and irregularities in implementation plague SC-ST schemes as well. Audits showed awarding of scholarships to financially ineligible students and those who didn’t provide caste certificates, payments made to beneficiaries having no bank accounts and hostel fees paid to beneficiaries who didn’t reside in hostels. In the case of loans disbursed by Central corporations—NSFDC, NSTFDC and NSKFDC—and state corporations like WBSCSTD&FC, targets were not met in most of the years.

Performance audits in health and education revealed glaring incompetence. The performance audit of the implementation of the National Rural Health Mission (NRHM)—with the Centre and the state sharing expenditure in the 75:25 ratio—revealed a shortfall of 43% in subcentres, 70% in primary health centres and 62% in community health centres. Strangely, the state spent only Rs 4,054.54 crore (55%) out of Rs 7,352.62 crore allocated to it under NRHM in 2011-16.

The centres do not have basic facilities and lack the required number of doctors, nurses and other staff. Newborn care corners and newborn stabilisation units were set up without proper planning and training for service providers, the audits showed.

Round-the-clock services are affected by the non-availability of ANMs, who don’t reside in the allocated quarters mostly because of their dilapidated condition. Antenatal and postnatal care cannot be extended to a considerable number of villages due to the shortfall in the appointment of ASHAs.

Audit of the centrally sponsored scheme Integrated Rashtriya Madhyamik Siksha Aviyaan (RMSA), which intends to improve the quality of government and government-sponsored schools, for the period 2011-16 showed a significant dropout rate at the secondary level. Out of 90,9,274 rural students admitted in class nine in 2011, only 50,6,465 remained in class 12 and the number dropped from 98,4,499 to 52,3,715 in 2012.

The audit pointed out inadequacy in the number of classrooms, science laboratories, computer rooms, toilets, drainage systems and drinking water facilities and the lack of qualified teachers. The state has miserably failed in establishing/upgradation of schools under RMSA.

Audits in higher education revealed qualitative asymmetry in terms of college density and GER. Placement and career counselling cells, alumni associations and employability enhancement programmes are either non-existent or inadequate. The audit raised concerns about the shortage of teachers, including the non-availability of prescribed qualifications for college teachers, and the student-teacher ratio.

There is a shortfall in the number of colleges in terms of all-India average and regional asymmetry, a dearth of computers in colleges not sufficiently equipped with ICT and several colleges don’t have the essential infrastructure for affiliation. Only 22% of government colleges are accredited by the NAAC. Quality control at all levels of higher education remains unmonitored. There is a large-scale mismatch between the All India Survey on Higher Education and the data supplied by state universities and colleges.

Though West Bengal gives top priority to MSME, audits showed incentives provided to ineligible enterprises and even closed units, irregular refund of VAT and uneven distribution of funds, etc. Only 26% of incentives were provided to the industrially backward regions in zones C and D each while zone B, consisting of Howrah, Hooghly and Burdwan, got 40%. Lack of supervision and delay in the allotment of funds are the other problems plaguing the sector.

Audits also found irregularities in departments concerned with major construction in the state. For instance, an audit of the records of three JNNURM-financed flyovers—Parama, Ultadanga and Wipro—constructed by KMDA in 2011-16 discovered non-adherence to the statutory requirements at various stages of planning, coordination and execution, especially with regard to quality-control activities.

KMDA did not have a formally documented quality policy, or quality assurance manual, and quality audit mechanism of its own. Further, essential quality-related records of the flyovers were not maintained. Important basic records like registers on inspection, measurement checks, work hindrance, concrete cube test, concrete pouring and materials brought to the site and their consumption were either not maintained or not produced before the auditors.

The main points of concern were deficiencies in DPR and geometric design case of the Parama flyover, preparation of inflated estimates in DPR-Wipro flyover, irregular acceptance of tender at higher rates in Parama and Ultadanga flyovers, contract awarded to a disqualified contractor for Ultadanga, inadmissible payment of Rs 5.02 crore to the Parama contractor, reimbursement made without supporting documents of detailed expenditure of Rs 6.45 to the Parama contractor, the contractor’s liability of Rs 3.62 crore discharged by KMDA for Parama and so on.

The moot point is that KMDA, as the executor, had appointed consultants/specialised agencies for feasibility study, structural designs, drawings, estimates, etc. without having qualifying criteria for the selection of consultants appointed on ad hoc basis on negotiations or limited tender. Moreover, agreements did not explicitly state the accountability of consultants.

The audit also covered the under-construction Vivekananda Road flyover, a part of which collapsed in Posta area in March 2016 after 81% completion of work. Since the start of the construction in July 2009, the contractor was granted nine extensions to complete the work. The audit observed that in the absence of records relating to the selection procedure and technical qualification/competence of the working contractor and its design consultant, nothing could be assessed.

KMDA had appointed M/s IRCLASS as the third-party quality control agency, whose quoted rate was 531% less as compared to its competitor. Interestingly, the concrete work of the superstructure had been cast in the absence of KDMA engineering staff.

Irregularities committed by the finance department itself are too many. Huge amounts drawn in AC bills have been adjusted by DC bills (on actual expenditure) for years. As per the CAG’s report, amounts requiring adjustment from 2012-13 to 2016-17 are Rs 800 crore, Rs 910 crore, Rs 1,587 crore, Rs 3,075 crore and Rs 2,357 crore, respectively.

The state government claims to have helped the unorganised labour sector. However, an audit showed that only Rs 8 crore against the payment obligation of their provident fund contribution of Rs 1,27.52 crore for 2018-19 has been paid and Rs 547.29 crore as outstanding dues still remains to be paid.

The most serious irregularity discovered was the issue of regularisation of excess expenditure by the state government in violation of Article 204 of the Constitution, which states that no money can be spent without the Legislature’s approval. Money spent for whatever reason from the Consolidated Fund has to be regularised by the Assembly.

However, as per the CAG’s report, excess expenditure of Rs 2,6695.26 crore pertaining to the years 2009-10 to 2017-18 was yet to be regularised by the Assembly.

But what is the use of audits if the observations and findings are not taken into account and corrective action is not taken? As soon as audit reports are laid before the Assembly, those relating to public undertakings go to the Committee on Public Undertakings and the rest to the Public Accounts Committee (PAC).

The committees scrutinise them and then take evidence from the concerned departments in respect of important and serious issues. Committees, particularly the PAC, play a vital role in bringing major irregularities and deficiencies to the Assembly’s notice and the government for corrective action.

Exactly, for this reason, it has become a practice to appoint a PAC chairman in Parliament as also the state Legislatures from the Opposition. This is required to ensure the accountability of the government to the Legislature. The practice was accepted in West Bengal Legislature also and it continued till 2016 when Banerjee didn’t want to leave any scope for criticism, including the PAC.

In 2016, Congress leader Manas Bhunia was appointed the PAC chairman in spite of the TMC’s vehement opposition. In 2017, Sankar Singh, another congress leader, was appointed chairman. Both of them performed poorly and the Speaker was compelled to appoint me as the chairman following the Opposition’s demand.

This writer was chairman for three years and submitted to the Assembly, despite the COVID-19 gap, as many as 12 reports that include the constitutional obligation of regularising excess expenditure from 2010 to 2018. The finance department, however, has been unable to act and Banerjee is yet to regularise the excess expenditure by way of moving Bills.

In 2022, Mukul Roy and then Krisna Kalyan—both of whom who had quit the BJP and joined the TMC—were appointed chairman. It is thus quite evident that Banerjee does not want an audit of vital issues for some obvious reasons.

Besides, the CM wants to take advantage of the non-availability of audit reports for putting ad hoc demands for funds claimed as outstanding dues from the Centre. An extreme example of such demand is the claim for outstanding dues of Rs 42,866 crore towards the expenditure on compensation for Bulbul, Amphan and Yas. While no report on the expenditure on Bulbul and Yaas is separately available, expenditure on Ampan was Rs 1,969 crore, as per the Economic Review 2020-21. But the state claimed a compensation of Rs 32,310 crore for Amphan.

The writer is a former chairman of the Public Accounts Committee of the West Bengal Assembly. The views are personal.