The Madhya Pradesh government had started 'Atal Jyoti Abhiyan' scheme early this year to provide 24-hour electricity in rural households and at least eight hours for agriculture sector.
The state's department of energy had directed all Commissioners and District Collectors that (inauguration of) the Atal Jyoti Abhiyan be treated as "utsav" (celebration), incorporating local bodies and gram panchayat, it said.
The Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited (MPPKVVCL), a wholly owned subsidiary of the state government mandated with distribution and retail supply of electricity, has implemented the scheme in five districts -- Jabalpur, Mandla, Shahdol, Anuppur and Umaria.
"For implementation or inaugural function, the company has paid Rs 42.50 lakh to the respective Collectors. In addition to this, Rs 37.50 lakh has been approved by the Managing Director for the implementation or inaugural function of this scheme in other 15 districts at the rate of Rs 2.50 lakh in each.
"Thus, a total amount of Rs 80 lakh has been approved and paid," the report, accessed through RTI by activist Ajay Dubey and based on inspection carried out in April, said.
The board of directors has approved another Rs 25 lakh each for 15 districts for conducting the inaugural function in a professional manner with the help of 'Madhya Pradesh Madhyam' (a state government undertaking) and to demand grant from the state government.
This would work out to be Rs 375 lakh (Rs 3.75 cr), it said. The company (having a separate entity) has undertaken the programme of state government with its own funds.
Incurring Rs 455 lakh (Rs 80 lakh and Rs 375 lakh) for such programme is not in line with the "financial propriety" of the company and needs justification, the report said.
"Thus, incurring Rs 455 lakh (Rs 4.55 crore) for inaugural function is not in line with financial propriety and this expenditure has become infructuous," the report said.
Atal Jyoti Abhiyan' scheme was launched to provide electricity in rural areas.
In reply to the audit observation, the management had stated that the company had not received any grant or assistance from the Madhya Pradesh government against the expenditure and had applied for grant in March, 2013.
It said the company is getting assistance for conducting various schemes in the form of equity or grant and expected to receive the same in this case also, and "it has to follow guidelines issued by the government".
"The reply is not tenable because the project of providing 24 hours electricity in rural households and at least eight for agriculture was undertaken by the company with loan from financial institutions. "Hence, incurring such huge amount towards inaugural function stating that the company is fully owned by Government of Madhya Pradesh (GOMP) and it has to follow guidelines issued by GOMP is not acceptable," the report said.
The report, which was based on inspection of accounts for period between April, 2011, and March, 2013, also termed as "not prudent and (not) acceptable" loss of Rs 35.80 crore due to writing off of electricity dues of Below Poverty line (BPL) families. A 'Samadhan Yojana' (solution scheme) was started by the company from March 31, 2011 for BPL families.
75 per cent outstanding amount (containing energy duty and surcharge) of such families as on September 30, 2010, would be waived off and balance 25 per cent would be collected toward final settlement in instalments, according to the scheme. "A review of revenue records of office has revealed that on requisition, the company intimated that Rs 35.80 crore was given as rebate toward (75 per cent of arrears amount) up to June, 2011, the figure relating to the year 2012-13 was not provided," the report said.
MPPKVVCL, Jabalpur, being a separate legal entity, its business is separate from the political affairs of the state, but the state government does have an obligation of assessing under privileged section of the society, it said. "But the cost of the rebate in the energy supplied should have not been waived off or written off by the company, leading to more loss to it.
"All the rebate, except surcharge rebate made in the energy consumption, must be claimed from the government as it directly affects the company's performance and its financial position.
Hence, the decision to write off 75 per cent of arrears of BPL families is not prudent and acceptable," the report said, adding that "management reply is awaited".
Dubey claimed that the government has misused tax payers' money in wrongfully funding its liabilities. "MP government has misused tax payers' money to fund its liability.
The state infrastructure like roads are in bad shape and authorities are waiving off electricity dues in a wrong way. We demand an enquiry into it," he said.