State violated GOI norms in utilising sugarcane loan: CAG

Mumbai, Apr 25 (UNI) The Comptroller and Auditor General of India (CAG) has indicted the Maharashtra Government today for violating the norms of the Central Government in disbursing Rs 600 crore it raised as loan to repay cane arrears of cooperative Sugar Factories for 2002-03.

Out of the market loan it had raised through the RBI, the State government had allowed the cooperative to utilise the loan to the tune of Rs 258.73 crore for various purposes including payment to the Chief Minister's Fund (Rs 6.16 cr), clearance of oustanding loans, deposits and interests (Rs 182.96 crore) and clearance of oustanding government dues (Rs 10.26 cr).

Out of the balance, the Cooperatives diverted Rs 60.55 crore for other purposes even without obtaining the state government's permission, the CAG report on performance audit of management of cooperative Sugar Factories in Maharashtra submitted to the State Assembly said.

The report said though the Government of India's conditions had stipulated that the loans were to be given to only those cooperatives which had cane price arrears, the government had released Rs 149.24 crore to 20 profit making cooperatives.

The one time loan to cooperatives were approved following the heavy losses the sugar factories had incurred in 2002-03 and were not in a position to pay the statutory minimum price declared by the Centre for sugarcane. They had demanded government assistance for the purpose. The interest liability of the loan raised by the State government was to be shared by both the Centre and state. The terms and conditions laid down by the Centre for the market borrowing included that the proceeds should be used only for clearing actual arrears for the 2002-03 sugar season and loans should not be given at anormative rate of Rs 100 per tonne of sugar produced as proposed by the state Government. The state had also violated this norm, the CAG said.

The CAG said the government did not create funds for infrastructural development and sugar reesearch. However, grants were released for the purpose. Road development grants were not utilised in the same year and even during the extended periods and were retained by the cooperatives. Cane development had suffered in the state as loans given from the sugar development fund were not effectively used by the cooperatives. The Commissioner did not ensure utilisation of loans released for modernisation and expansion.

UNI VK OBB JT DB1844