This is the third article in this series. Read the first and second articles.
The Comptroller and Auditor General (CAG) reports presented to the parliament this monsoon session have flagged that Indian Railways could not generate a net surplus during 2021-22 compared to 2020-21, funds for pension schemes were diverted for publicity of other schemes, corruption under Ayushman Bharat, and the need for daily updation of the exchange rate.
In part three of The Wire’s series on all 12 CAG reports presented to parliament, we look at findings from four reports:
- Union Government, (Railways) Railways Finances
- Performance Audit of Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana – Union Government (Civil) National Health Authority Ministry of Health and Family Welfare
- Performance Audit of National Social Assistance Programme – Union Government (Civil), Ministry of Rural Development
- IT Audit of Indian Customs Electronic Data Interchange System (ICES) 1.5, Union Government Department of Revenue-Indirect Taxes (Customs)
Indian Railways could not generate a net surplus during 2021-22 compared to 2020-21
The CAG report on Union Government, (Railways) Railways Finances has revealed that the Indian Railways could not generate a net surplus during 2021-22 as compared to 2020-21.
The Operating Ratio (OR) was 107.39% in 2021-22 against 97.45% in 2020-21. Operating Ratio refers to the ratio of working expenses to gross earnings.
A higher ratio indicates a poorer ability to generate surplus. Against the target of 96.15% in the Budget Estimates, the OR of Railways was 107.39% in 2021-22.
“This meant that railways spent Rs 107.39 to earn Rs 100. As compared to the Operating Ratio of 97.45% during 2020-21, there was deterioration in 2021-22,” the report said.
The report said that compared to the last five years, the OR was the highest in 2021-22.
In 2017-19 the OR was 98.44%, followed by 97.29% in 2018-19, 98.36% in 2019-20, 97.45% in 2020-21 and 107.39% in 2021-22.
“..the OR of Indian Railways reached an all-time high of 107.39% in 2021-22,” the report said citing the five-year figures.
The report found that the Gross Traffic Receipts increased by 36.02% during 2021-22 as compared to 2020-21 due to an increase in passenger earnings, other coaching earnings, and freight earnings.
However, the total expenditure of the Ministry of Railways (MoR), “increased by 35.19%, the capital expenditure increased by 22.61% during 2021-22”.
“On the other hand, revenue expenditure increased by 49.30% during the year. MoR incurred around 75.83% of the total working expenses on staff cost, pension payments, and lease hire charges on rolling stock.”
It also found that the Railways incurred an additional expenditure of Rs 7,778.43 crore more than the sanctioned budget of Rs 5,7626.20.
Treatment for the dead and discharge before surgery under Ayushman Bharat
The CAG report on the Performance Audit of Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana – Union Government (Civil) National Health Authority Ministry of Health and Family Welfare – has found several instances of corruption in one of the Narendra Modi government’s flagship schemes on health.
The audit included the time period of September 2018 to March 2021. The audit was conducted on 964 hospitals in 161 districts of all 28 states and Union territories (UTs). Delhi, Odisha, and West Bengal have opted out of this scheme.
The auditors found large-scale corruption in insurance claims settlement.
In 2.25 lakh cases, the date of the ‘surgery’ done was shown to be later than the date of discharge. More than 1.79 lakh such cases were found in Maharashtra for which the claimed amount was over Rs 300 crore.
In other instances, the hospitals had made claims and the State Health Authority (SHA) transferred money for dates even before the inception of the scheme.
Lakhs of claims continued to be made against some who had been shown as ‘deceased’ in the database.
The scheme stipulates that a unique Pradhan Mantri Jan Arogya Yojana (PMJAY) ID should be issued to beneficiaries once verification is complete. The audit discovered that 1.57 lakh unique IDs appeared more than once in the database.
After widespread reporting on the CAG report including by The Wire, the health ministry on Thursday, August 17, issued a press release fact-checking media reporting on the CAG findings.
The release was titled ‘Myths Vs Facts: Media Reports claiming AB PM-JAY beneficiaries who have been declared dead on the system availing treatment at hospitals are misleading’.
However, in the four-page release, the ministry did not cite a single specific example where the media reports had been wrong in quoting the CAG report, for instance, to say the CAG report was misquoted or quoted out of context.
Pension scheme funds diverted to publicise other schemes
The CAG report on the Performance Audit of the National Social Assistance Programme – Union Government (Civil), Ministry of Rural Development, has found that funds meant to publicise the scheme were diverted for publicity of other schemes by the ministry.
The National Social Assistance Programme (NSAP) is meant to provide social assistance benefits to the below poverty line (BPL) households in the case of old age, disabled, widows, and the death of the primary breadwinner.
The audit covered the period between 2017-18 to 2020-21.
The NSAP includes five sub-schemes, of which, three are pension schemes, including the Indira Gandhi National Old Age Pension Scheme (IGNOAPS), Indira Gandhi National Widow Pension Scheme (IGNWPS), and Indira Gandhi National Disability Pension Scheme (IGNDPS).
The other two sub-schemes are the National Family Benefit Scheme (NFBS) – a one-time assistance to the bereaved family in the event of the death of the breadwinner, and the Annapurna scheme – food security to the eligible old age persons who have remained uncovered under IGNOAPS.
The report said that funds of Rs 2.83 crore earmarked for IEC (Information, Education, and Communication) activities under NSAP were diverted for “campaigning of other schemes”.
The audit added that the absence of a prescribed procedure for proactive identification of beneficiaries coupled with the lack of IEC activities resulted in delayed/non-coverage of eligible beneficiaries from the ambit of NSAP and non-achievement of universal coverage of beneficiaries.
The report said that the Ministry of Rural Development in January 2017 decided to campaign through hoardings in states and Union territories for giving due publicity to all programmes/schemes of the Ministry.
“Administrative approval and financial sanction of Rs 39.15 lakh was taken (June 2017) for a publicity campaign through hoardings with a limit of 10 hoardings at each capital city of the state and UT.
Administrative approval and expenditure sanction of Rs 2.44 crore was taken (August 2017) for campaigning Gram Samriddhi, Swachh Bharat Pakhawada and publicity material of multiple schemes of the Ministry through five hoardings in each District for 19 States.”
Subsequently, work orders were issued in June and September 2017 and publicity campaigns were to be undertaken in September 2017.
“The funds for the said campaign were stated to be available under National Rural Employment Guarantee Scheme and were approved by the competent authority to be incurred under the same head; however, audit observed that funds were actually incurred from social security welfare-NSAP schemes,” the report said.
“However, the advertisement of only PMAY-G (Pradhan Mantri Awaas Yojana- Gramin ) and DDU-GKY(Deen Dayal Upadhyaya Grameen Kaushalya Yojana) schemes were mentioned in the work order and no schemes of NSAP were included in the work order.
“Further, the campaigns were to be undertaken by DAVP(Directorate of Advertising & Visual Publicity) under intimation to the department; however, the payment to DAVP was made without confirmation of the execution of the work.
“Hence, planned IEC activities under NSAP were not undertaken as envisaged and funds of Rs 2.83 crore were diverted for campaigning in respect of other schemes of the Ministry. Hence, IEC activities intended to create awareness among potential beneficiaries of NSAP could not be taken up even though there was earmarking of funds for IEC activities.”
In addition, the report said that while the scheme is meant to include universal coverage, the report found that it was being implemented in a “demand-driven mode where benefits were provided to only those beneficiaries who applied for pensions/benefits under NSAP themselves”.
The report also found “idling of funds of Rs 18.78 crore”.
It said that while one of the key principles of NSAP is regular monthly disbursement of pension, in eight States/UTs, funds received under NSAP were lying idle either with the states/Union territories concerned or with implementing agencies.
This included Bihar, Sikkim, Arunachal Pradesh, Goa, Kerala, Andaman and Nicobar Islands, Jammu and Kashmir, and Tripura.
The report found “Rs 18.78 crore were lying idle in eight States for a period ranging from one to five years”.
“The reasons for idling of funds were such as the release of funds at the fag end of the financial year, non-revalidation of funds from administrative department, duplication and non-permissible age limit of the beneficiaries,” it said.
The report added that this also shows lack of financial monitoring on part of the States/UTs which manifested in irregular payment of pension to the beneficiaries.
Implementation of module for daily updation of exchange rate
The CAG report on Union Government (Indirect Taxes – Customs) contains significant results of the Information Technology (IT) Audit of the Indian Customs Electronic Data Interchange System (ICES 1.5).
The test audit was conducted during December 2020 to May 2022 covering the period 2015-16 to 2019-20.
The report said that the Central Board of Indirect Taxes and Customs (CBIC) determines the rate of exchange of conversion of major transactional foreign currencies generally after every 14 days on a regular basis and issues Notifications (Non-Tariff).
Based on these Exchange Rate Notifications, the Directory Officer after getting the approval of Directory Manager of the Directory Management Site makes changes in ICES.
“Implementation of a system which captures daily fluctuation in the exchange rate will minimise the undue benefit or loss to importers and exporters and correspondingly to the Department,” it said.
The report said the filing of custom duty refunds is being done manually.
“In Audit’s opinion, the work flow related to capturing and processing of refund claims needs to be automated on the lines of the GSTN (Goods and Services Tax Network) System. Decision of refund taking into considerations various factors like post adjudication, post-Appeal, double duty refund, refund due to re-assessment of duty etc could be taken by the competent authority online, with work flow automation. This will lead to effective monitoring and increase transparency,” it said.