The
Comptroller and Auditor General (CAG), in a report tabled in Parliament,
pointed out that several ineligible farmers were favoured and a large number of
deserving small and marginal farmers left out in implementation of the United
Progressive Alliance’s much-touted Rs. 52,000-crore farm loan
waiver scheme.
The report said that, the
scheme, meant to help indebted farmers in districts where suicides occur, was
so haphazard and faulty in implementation that no records were maintained of
farmers’ applications accepted or rejected by lending institutions or how many
farmers were given fresh loans as a result of debt waiver/relief.
The Agricultural Debt Waiver
and Debt Relief Scheme (ADWDRS) was launched in Vidarbha by Prime Minister
Manmohan Singh in May 2008. Initially, it was launched in Maharashtra ,
Andhra Pradesh and Kerala, where suicides by farmers peaked in 2008. It was
estimated that 3.69 crore small and marginal farmers and about 0.60 crore other
farmers would benefit from the scheme and become eligible for fresh loan.
According to the CAG, the
monitoring of the scheme was “deficient.’’ There was even prima facie evidence
of tampering with, overwriting and alteration of records. In certain cases,
lending institutions such as banks claimed from the government charges such as
interest in excess of the principal amount, unapplied interest, penal interest,
legal charges, inspection charges and miscellaneous charges, all of which they
themselves should have borne.
The
report said that, out of 9,334 accounts test-checked in audit across nine
States, 1,257 (13.46 per cent) were found to be eligible for benefit, but were
not considered by the lending institutions. At the same time, of the 80,299
accounts granted debt waiver, in 8.5 per cent cases, the beneficiaries were not
eligible for either debt waiver or debt relief. They were those who had taken
loans for non-agricultural purposes or whose loans did not meet eligibility
conditions.’
In violation of guidelines, a
private scheduled commercial bank received reimbursement for loans to the tune
of Rs. 164.60 crore extended to micro finance institutions. Besides, the
Department of Financial Services (DFS) under the Ministry of Finance, which
implemented the scheme, accepted the reimbursement claims of the RBI in respect
of urban cooperative banks, amounting to Rs. 335.62 crore, despite the fact
that even the total number of beneficiaries’ accounts was not indicated.
The CAG observed that in the
absence of monitoring of the scheme, lending institutions did not issue debt
waiver/relief certificates to eligible beneficiaries. Nor was acknowledgement
sought from farmers making them eligible for fresh loans.
The RBI and the National Bank
for Agriculture and Rural Development were the nodal agencies for monitoring,
but they themselves were relying on the data of lending institutions, without
independently checking the veracity of claims by banks and cooperative
societies. After the presentation of the draft report to the government in
January, the CAG noted that the DFS had asked the RBI and NABARD to take
immediate corrective measures.
PM promises strict action against
‘irregularities’ in loan waiver scam:-
Facing relentless opposition, Prime Minister
Manmohan Singh assured the Rajya Sabha that “stringent action” against those
who had siphoned off money from the farm loan waiver scheme. The government
also agreed to have a discussion on the Comptroller and Auditor-General’s
report. His promise of action apart, Dr. Singh favoured that the normal procedure
be followed: referring the report to the Public Accounts Committee (PAC).
Raising the issue during zero
hour, Leader of the Opposition Sushma Swaraj said thousands of people were
denied the benefit, while those ineligible got the relief. Demanding that bank
officials and auditors be questioned, she said the RBI had convened a meeting
of banks in January and given them time to rectify the mistakes, “but no action
was taken.” Ms. Swaraj also sought a structured discussion on the “very serious
matter.”
The former Prime Minister,
H.D. Deve Gowda of the Janata Dal (Secular), said it was big landlords who had
cornered the benefit in the name of their tenants or landless farmers. He
demanded land reforms without which any pro-farmer scheme could not be properly
implemented.
RBI orders performance audit of farm loan
waiver:-
Considering the serious
nature of the observations made by the Comptroller and Auditor General (CAG) on
the gross misuse of the agricultural debt waiver and debt relief schemes, the Reserve
Bank of India has asked all scheduled commercial banks and local area banks to
undertake a complete verification of the list of beneficiaries with priority
being given to areas where indebtedness was high. The RBI has told them to fix
the accountability on those officials involved in the administrative/accounting
lapses.
Banks have been asked not to
spare the internal auditors and statutory auditors who were responsible for
verification, certification, or for passing the claims. They must be identified,
and full responsibility fixed at the earliest with no exceptions.
The RBI said in a
strongly-worded notification to chairmen, managing directors and chief
executives of banks that, cases of extending of benefits to ineligible
beneficiaries must be dealt with on top priority, and full recoveries as per
law must be made to ensure no loss to the exchequer. It will be the personal
responsibility of the institutional heads to ensure that such recoveries are
effected in full.
The apex bank said debt
waiver/debt relief certificates must be issued in all eligible cases
immediately, and full records of such issuance must be kept ready for
inspection. Banks have also been directed to draw up a list of all eligible
beneficiaries who were not extended the benefits. They have also been asked to
examine and establish the reasons for the denial of the rightful dues of the
eligible beneficiaries. Action may be initiated in all cases where malafides or
carelessness appears likely.
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