CAG raps Maharashtra on irrigation project delays

CAG says Rs 43,270.01 cr was spent by the water resources department on 426 incomplete projects

The Comptroller & Auditor General (CAG) has rapped the Maharashtra government for irrigation projects not being completed despite having started these five to 45 years ago.

In its report for the year ended March 2012, presented to the state Legislature today, the CAG said Rs 43,270 crore was spent by the water resources department on 426 incomplete projects. In 242 of the 426 incomplete projects, it said the initial budget rose to Rs 33,832 crore from Rs 7,215 crore, up 369 per cent. This resulted in cost overrun of Rs 26,617 crore. "Though these irrigation projects commenced five to 45 years ago, they are not yet complete. The oldest being Kudki project, in respect of which the year of commencement was 1967, with a target date of completion in five years (1972)."

The CAG's observations come at a time when the Maharashtra government-appointed special investigation team, led by water expert Madhav Chitale, is looking into the multi-crore irrigation scam, in which more than 36 irrigation projects in the Vidarbha region remain incomplete, with a cost overrun of Rs 26,000 crore.

High fiscal liabilities
The CAG said the state's fiscal liabilities increased in 2011-12 by Rs 26,187 crore to Rs 2,55,756 crore, up from Rs 2,29,569 crore in 2010-11. "The rise was mainly due to an increase of Rs 17,994 crore in public debt, Rs 1,399 crore in reserve fund, Rs 4,533 crore in deposits and small savings and Rs 2,261 crore in provident funds."

The auditor observed that these liabilities were around twice the revenue receipts and thrice the state's own resources. The returns on investments made by the state fell to 0.04 per cent from 0.28 per cent. It emphasised the need to ensure better returns on investments. "Otherwise, high cost borrowed funds will continue to be invested in projects with low financial returns. The government must prepare itself better to face future liabilities/commitments ...."

VAT revenue lost
The state has incurred a revenue loss due to the non-registration of builders and developers in the state. The report observed that 941 builders and developers out of 1,219, whose turnover of sales was Rs 2,301 crore, though liable for registration, were not registered under the Maharashtra Value Added Tax.