Lok Sabha Question No. 1005 (UNSTARRED), answered on 2016-03-02
Subject: General Financial Rule
Ministry: STATISTICS AND PROGRAMME IMPLEMENTATION
Asked by: RAM CHARITRA

## GOVERNMENT OF INDIA

## MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTATION

## LOK SABHA

## UNSTARRED QUESTION NO.1005 TO BE ANSWERED ON WEDNESDAY, THE 2 ND  MARCH, 2016

## GENERAL FINANCIAL RULE

1005. SHRI RAM CHARITRA NISHAD:

Will the Minister of STATISTICS AND PROGRAMME IMPLEMENTATION be pleased to state:

- whether there have been instances of blatantly violating general financial rule under Members of Parliament Local
- (a) Area Development Scheme;
- (b)
- if so, the details thereof;
- (c) whether it is true that 12 district authorities of six States inflated  the  figures  of  expenditure  by  Rs.  35  crore  by depicting the entire advance of Rs.100.17 crore released to the implementing authorities as utilised under MPLADS;
- (d)
- if so, the details thereof; and
- (e) the action taken by the Government thereon?

## ANSWER

MINISTER  OF  STATE  (INDEPENDENT  CHARGE)  FOR  MINISTRY  OF STATISTICS  AND  PROGRAMME  IMPLEMENTATION  AND  MINISTER OF  STATE  FOR  MINISTRY  OF  EXTERNAL  AFFAIRS  [GENERAL  (Dr.) V.K. SINGH (Retd.)]

- (a) & (b): Instances  of  violation  of  guidelines  or  rules  come  to notice from time to time. In such cases appropriate action is taken by the State Governments / District Authorities, including penal and departmental action  and  recovery  /  recoupment  of  MPLADS  funds. Specific  cases  of  malafide  or  financial  malfeasance  coming  to notice of the Ministry are sent to the State / District Authorities for the  appropriate  action.  Till  the  necessary  appropriate  action  is completed  by  the  State  Governments  /  District  Authorities,  the matter is not treated as settled by the Ministry.

(c) to (e): Release of MPLADS funds is made MP-wise on submission of  the  requisite  documents  and  certificates  by  the  Nodal  District Authorities, which include Audit Certificates, Utilization Certificates and Monthly Progress Reports. District Authorities (DAs) are required to furnish the Utilization Certificates (UCs) only when the Implementing Agencies (IAs) have actually incurred the expenditure. Instances of mistakes in the documents and certificates that come to notice during examination are communicated to the District Authorities for the necessary rectification. Funds are released after all requisite documents and certificates are duly available.

Performance Audit of MPLADS for the period 2004-2005 to 2008-09 was conducted by Comptroller and Auditor General of India (C&AG), who furnished their report Union Government (Civil) No. 31 in 20102011.

Para 6.2.2 'Incorrect reporting  of  financial progress by  the  DAs'  in Chapter  6  'Funds  Management' inter  alia  stated  that  'the  DAs reported inflated figures of expenditure to the Ministry, by treating the  amount  released  to  the  IAs  as  the  final  expenditure,  without ascertaining  the  actual  expenditure  incurred.'  and  that  'In  12 districts of six States/UTs (Chhattisgarh, Jharkhand, Lakshadweep, Nagaland,  Tripura  and  Sikkim),  Rs.  100.17  crore  was  released  as advance to the IAs for execution of works during the years 2004-09, out of which Rs. 65.18 crore only had actually been spent by the IAs. Instead of reporting the actual expenditure to the Ministry, the DAs depicted the entire advance of Rs. 100.18 crore as utilized in their UCs, thus, inflating the figures of expenditure by Rs. 35 crore, and presenting an incorrect picture of fund utilization under the Scheme. The State-wise details are in Annex 6.1.'

Annex 6.1 is given in Annexure-I. Audit paras in the Performance Audit Report of C&AG for the period 2004-2005  to  2008-2009  including  para  6.2.2.  where  action  was required at the end of the State Governments / UT Administrations were  taken up with the concerned  State Governments  /  UT Administrations and District Authorities for the appropriate action. Based on the Performance Audit Report No. 31 of 2010-2011 of the C&AG,  the  Public  Accounts  Committee  (PAC)  furnished  their  55 th

Report  (15 th   Lok  Sabha)  on  Members  of  Parliament  Local  Area Development Scheme in 2011-12. Action  taken  notes  on  the  observations  /  recommendations  of  the report on all 33 paras were furnished to the PAC in September 2013 after vetting from Director General of Audit (Central Expenditure). It has  also  been  submitted  by  the  Ministry  in  its  action  taken  notes that:  'In  case  of  infringements  of  rules,  guidelines  and  norms, including  utilization  of  funds  for  ineligible  works,  which  come  to notice  from  time  to  time  (including  C&AG  reports),  the  Ministry takes-up  and  follows-up  the  matter  with  the  State  Government  / District Authority concerned and monitors that appropriate action is taken by the State Government  / District Authority. Till the necessary  appropriate  action  is  taken  by  the  State  Government  / District  Authority,  the  matter  is  not  treated  as  settled  by  the Ministry.'  (submitted  in  action  taken  note  on  para  15;  similar submissions made in action taken notes on paras 3, 5, 11, 16, 24, 26, 27 and 32). The Ministry has also issued a circular letter no. C-16/2011-MPLADS(Vol.  I)  dated  06.11.2015  on  the  subject  of  'Qualitative,  rule-bound and  timely  implementation  of  the  MPLAD  Scheme'  in  which  the District Authorities / State Governments have been informed that 'In cases of infringement of rules or guidelines coming to notice of this Ministry (including through C&AG report/s etc.), this Ministry takesup and follows-up the matter with the State Governments / District Authorities concerned. Unless and until the necessary appropriate action, including action in the three domains  of (a) criminal culpability of the concerned  persons,  (b) departmental  action against  the  errant  officials  and  (c)  civil  action  for  recovery  of MPLADS  funds  with  interest,  is  taken  by  the  State  Government  / District  Authority,  the  matter  is  not  treated  as  settled  in  this Ministry. This position has also been submitted by this Ministry to the PAC.' been timely implementation of the MPLAD Scheme and (ii) not to treat cases of infringement  of  rules  or  guidelines  as  settled  unless  and  until  the

And the District Authorities / State Governments have requested to '(i) ensure qualitative, rule-bound and necessary appropriate action is duly completed.'

Annexure

Annexure-I referred to in reply to parts (c) to (e) of Lok Sabha Unstarred Question No.1005 for answer on 02.03.2016.

Annex 6.1

## (Refers to paragraph 6.2.2) Reporting of financial progress of work by the DAs

(Rs. in crore)

| S. No.   | State       | DA                 | Year    |   Expenditure shown in the UC |   Actual expenditure incurred by agencies |   Over statement of expenditure |   Percentage of overstated expenditure to the actual expenditure |
|----------|-------------|--------------------|---------|-------------------------------|-------------------------------------------|---------------------------------|------------------------------------------------------------------|
| 1        | Chattisgarh | Raipur             | 2004-05 |                          3.83 |                                      3.62 |                            0.21 |                                                             5.8  |
| 1        | Chattisgarh | Raipur             | 2006-07 |                          3.81 |                                      3.55 |                            0.26 |                                                             7.32 |
| 1        | Chattisgarh | Raipur             | 2007-08 |                          3.51 |                                      3.09 |                            0.42 |                                                            13.59 |
| 1        | Chattisgarh | Bilaspur           | 2005-06 |                          8.19 |                                      7.39 |                            0.8  |                                                            10.83 |
| 1        | Chattisgarh | Bilaspur           | 2006-07 |                          6.25 |                                      5.44 |                            0.81 |                                                            14.89 |
| 1        | Chattisgarh | Bilaspur           | 2007-08 |                          8.51 |                                      6.79 |                            1.72 |                                                            25.33 |
| 2        | Jharkhand   | Deoghar            | 2005-06 |                          1.06 |                                      0    |                            1.06 |                                                           100    |
| 2        | Jharkhand   | Deoghar            | 2006-07 |                          2.36 |                                      2.26 |                            0.1  |                                                             4.42 |
| 2        | Jharkhand   | Deoghar            | 2007-08 |                          1.47 |                                      1.42 |                            0.05 |                                                             3.52 |
| 2        | Jharkhand   | Dhanbad            | 2005-06 |                          5.79 |                                      3.47 |                            2.32 |                                                            66.86 |
| 2        | Jharkhand   | Dhanbad            | 2006-07 |                          5.66 |                                      5.29 |                            0.37 |                                                             6.99 |
| 2        | Jharkhand   | Lohardaga          | 2006-07 |                          2.96 |                                      0.62 |                            2.34 |                                                           377.42 |
| 2        | Jharkhand   | Hazaribagh         | 2004-05 |                          1.36 |                                      1.09 |                            0.27 |                                                            24.77 |
| 2        | Jharkhand   | Hazaribagh         | 2005-06 |                          3.43 |                                      2.7  |                            0.73 |                                                            27.04 |
| 2        | Jharkhand   | Hazaribagh         | 2006-07 |                          2.15 |                                      1.9  |                            0.25 |                                                            13.16 |
| 3        | Lakshadweep | Lakshadweep        | 2004-09 |                          9    |                                      4.2  |                            4.8  |                                                           114.29 |
| 4        | Nagaland    | Dimapur and Kohima | 2004-09 |                         18    |                                      7.42 |                           10.58 |                                                           142.59 |
| 5        | Tripura     | North and West     | 2004-09 |                          0.28 |                                      0.13 |                            0.15 |                                                           115.38 |
| 6        | Sikkim      | East District      | 2005-06 |                          0.23 |                                      0    |                            0.23 |                                                           100    |
| 6        | Sikkim      | East District      | 2006-07 |                          2.25 |                                      0.79 |                            1.46 |                                                           184.81 |
| 6        | Sikkim      | East District      | 2007-08 |                          4.44 |                                      1.24 |                            3.2  |                                                           258.06 |
| 6        | Sikkim      | East District      | 2008-09 |                          5.64 |                                      2.77 |                            2.87 |                                                           103.61 |
| Total    | Total       | Total              | Total   |                        100.18 |                                     65.18 |                           35    |                                                            53.7  |

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