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CAG has found that several farmers who were not eligible, still got the waiver while various others were disqualified by banks to take the benefit of the scheme despite being eligible.
CAG audited 22.32% of the total accounts. The agriculture debt waiver and debt relief scheme was launched by Finance Minister P Chidambaram in 2008 a year before the General Elections. The scheme according to some analyst played a big part in bringing UPA back to power in 2009.
CAG’s report said that 8.5% of the accounts which were granted the benefit were not eligible for the same. These claims of these accounts amounted to around Rs 20.5 crore.
The auditor has also found evidence of tampering, over-writing and alteration of records. CAG has criticized Department of Financial Services (DFS) for inefficient monitoring of the scheme.
DFS was dependent upon the nodal agencies for monitoring the compliance of its instructions. But the CAG found that the nodal agencies themselves were relying on certificates and data of lending institutions without any independent verification.
“Maintenance of proper and complete documentation with respect to each claim was critical to efficient management of the scheme” CAG report said. DFS also accepted claims from RBI in respect of urban cooperative banks amounting to Rs 335 crore even though the total number of beneficiaries was not mentioned, the audit report said.
Besides, CAG has found reimbursements amounting to Rs 164 crore were extended to Micro Finance institutions in violation of the guidelines. CAG carried out its review from April 2011 to March 2012, covering 25 states involving a field audit of 90, 576 farmers’ accounts.
The top auditor also noted that debt waiver certificates were not issued to eligible beneficiaries in 34% of the test checked accounts. Such certificates entitle the farmers to fresh loans.
UPA had announced the The Agriculture Debt Waiver and Debt Relief Scheme in February 2008. In the last four years, government has waived more than Rs 52,000 covering approximately 3.45 crore small and marginal farmers.
The scheme was to be implemented by the Scheduled Commercial Banks, Regional Rural Banks, Cooperative Credit Institutions (including Urban Cooperative Banks) and Local Area Banks by 30 June 2008. The part of the scheme for debt waiver to the eligible small and marginal farmers was implemented by the due date.
Under the scheme, complete waiver of ‘eligible amount’ was to be provided to small and marginal farmers while a one-time relief of 25% of the eligible amount was to be provided to other farmers subject to payment of the balance 75% of the total amount by the farmer.
