The Comptroller and Auditor General (CAG) has found "lapses and errors" in the implementation of the Rs71,680 crore debt waiver and debt relief scheme launched in 2008 to ease burden on farmers.
So far the government has reported disbursement of Rs52,000 crore to farmers unable to get loans for non-payment of the disbursements between 1997 and 2007. Political analysts believe it was a major game changer helping the UPA to return of power in 2009 general elections.
The CAG randomly checked 90,576 cases to the extent of 22.32 per cent and found serious concern about implementation of the scheme. It noted that eligible farmers were left out in 13.46 per cent cases in the test audit of 9 states while benefits were extended in 8.3% cases to the farmers who were not eligible. It even found prima facie evidence of tampering, over-writing and alteration of records in 2824 cases in the trial audit amounting to Rs8.64 crore.
Even in some cases an amount of Rs164.60 crore was extended to micro finance institutions in five states instead to farmers through a private scheduled bank. Ahead of the budget, senior Congress leaders were pushing finance minister P Chidambaram for another farm loan waiver to please farmers.
The scheme envisaged complete waiver of the loans up to Rs50,000 in case of the small and marginal farmers and the one-time relief of 25 per cent to other farmers provided they pay off the balance 75 per cent. The audit found that those not entitled for the waiver were given the benefit and the lending institutions claimed charges like interest from the government that were to be borne by them.
The CAG further pointed out that there was no proof of the issue of debt waiver or relief certificates in 21,182 of the 61,793 accounts of the farmers checked in the test audit. It amounted that 34.28% farmers were not getting the certificates to entitle hem to fresh loans.
Also there was no monitoring from the government. Instead, it depended entirely on the nodal agencies to monitor and they relied on the lending institutions without any independent verification. Out of 80,299 accounts checked, the beneficiaries were not eligible in 8.5 cases, resulting in the outflow of Rs20.50 crore for wrong purposes.
The CAG raised objections in 11,053 of the 46,291 cases of the farmers its auditors test-checked in 25 states The highest number of 3342 objections accounting to 60 per cent of 5422 text-checked cases were recorded in Madhya Pradesh, followed by around 50 per cent in case of Uttar Pradesh where objections were made in 1494 of the 2971 cases checked.
In contrast, Maharashtra and Rajasthan had very few cases in which audit objections were raised. Only 136 of the 2454 test-checked cases in Maharashtra had objections and only 391 of the 2678 cases in Rajasthan.
Also the test audit also showed that 2276 farmers who were neither small nor marginal carried away the benefit of debt waiver amounting to 11.04 crore. Manipur topped with 411 such farmers with Maharashtra only five.