The failure of the Khadi and Village Industries Corporation (KVIC) to follow up on loans led to Rs. 551.46 crore not being recovered, and also resulted in the diversion of Rs. 226.70 crore meant for servicing loans of SBI up to March 31, 2015, the CAG said in its compliance audit report.
As on March 31, 2015, the total loans outstandings of the KVIC, which falls under the Medium, Small and Micro Enterprises (MSME), was Rs. 1,008.30 crore (Government of India) and Rs. 509.03 crore (Consortium Bank Credit arrangement with State Bank of India), said the report, which was tabled in the Lok Sabha on July 2.
“An amount Rs. 272.48 crore and Rs. 279.98 crore, respectively, was overdue with beneficiaries in respect of loans from KVIC funds and CBC funds,” said the report, adding that KVIC had diverted funds meant for development, to payment of Rs. 226 crore to SBI.
However, as per the KVIC management, “such diversion and such an arrangement did not have the explicit approval of the Ministry”.
With regard to the lack of transparency and the monitoring of the Scheme of Fund for Regeneration of Traditional Industries (SFURTI), the CAG noted a variation in figures reported by KVIC and by the field offices of various clusters.
For instance, “in respect of Swami Ramanand Tirth cluster…the production for 2011-12 was Rs. 235.21 lakh and that as per the field office report was Rs. 164.92 lakh,” it said, adding that in this cluster, the signatures of the beneficiary artisans to whom charkhas were distributed were not found available on record.
The reported also faulted the Agriculture and Processed Food Products Export Development Authority (APEDA) for not collecting service tax from exporters of certain agriculture and processed food products, and lawyers who rendered certain legal services that resulted in avoidable expenditure of Rs. 6.15 crore.
The APEDA functions under the Commerce & Industry Ministry.
The auditor also pulled up the Coconut Development Board for poor monitoring of a project that had resulted in blocking of funds amounting to Rs. 1.61 crore.
Source: Business Line
