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NEW DELHI: Diversion of funds totalling nearly Rs115 crore and ineligible beneficiaries getting benefits were among the several lapses found by the CAG in implementation of JNNURM, the Centre’s flagship urban infrastructure development scheme.

Diversion of funds, ineligible beneficiaries

NEW DELHI: Diversion of funds totalling nearly Rs115 crore and ineligible beneficiaries getting benefits were among the several lapses found by the CAG in implementation of JNNURM, the Centre’s flagship urban infrastructure development scheme.

The Government auditor Comptroller and Auditor General also said that a few cases of unauthorised and irregular expenditure and even instances of undue favours to contractors have come to light.

The CAG in its report on ‘Performance Audit of Jawaharlal Nehru National Urban Renewal Mission’ tabled in Parliament on Thursday said only 22 of the 1,517 housing projects approved under the scheme were completed by the due date of March 2011.

Noting that the Union ministries were "not equipped" to monitor a project of this magnitude, the CAG said the Centre must identify the deficiencies in monitoring the scheme both at the central and state level and address them during the next two years.

The 103-page report with annexures observed that a crucial objective of bringing about reforms in the governance of urban local bodies could not be achieved through the scheme.

"We observed that a total of 1,517 and 1,998 housing and infrastructure projects respectively were approved for implementation between 2005 and 2011. However, as on 31 March 2011, in respect of the housing projects, only 22 of the 1517 approved projects were completed," the CAG report said.

"The status of dwelling units within these housing projects was only marginally better but remained low as only 26 per cent of approved dwelling units had been completed. In respect of urban infrastructure projects, we observed that out of the 1,298 projects approved, only 231 projects (18 per cent) were completed," the report stated.

The report pointed out that there were eight cases of diversion of funds in urban infrastructure projects in Andhra Pradesh, Chhattisgarh, Haryana, Jharkhand, West Bengal and Himachal Pradesh. The amount diverted was Rs 114.68 crore, it said.

The diversion was for purposes other than those admissible under JNNURM and in some cases even for non-JNNURM purposes. In one instance, funds were utilised for payment of salary to the municipal staff.

The CAG report also said that in some cases, there were deficiencies in selection of beneficiaries of houses for urban poor which led to risks of ineligible beneficiaries getting the benefit.

It also touched upon unauthorised and irregular expenditure.

"A few cases of unauthorised and irregular expenditure and even instances of undue favours to contractors came to light. Due to delays in implementation of the projects, there were many cases of blockade of funds due to purchase of machinery/ equipment which was not put to use," the CAG said.

The report said the government should monitor the execution of projects so that there are no diversions to ineligible beneficiaries.

The CAG has also suggested that the ministry of urban development and the ministry of housing and urban poverty alleviation should introduce a "zero tolerance policy" at all levels in respect of irregular expenditure and diversion of funds by the way of a greater financial discipline.

The JNNURM is a central government scheme which is implemented by the ministries of urban development and housing and urban poverty alleviation with an aim to improve infrastructure and governance in Indian cities.

Only 11 out of 216 sample projects selected by it for the period 2005-06 to 2010-11 had been completed and also referred to "various deficiencies" that it found in the implementation of these projects, the report stated.

"This included deficient preparation and appraisal of detailed projects, non-availability of land, escalation in costs, change in design and scope etc. In the housing projects many dwelling units remained incomplete primarily for want of land," it said.

The report said that against an allocation of Rs 66,084.66 crore by the Planning Commission, the government of India had only made an allocation of Rs 37,070.15 crore of which only Rs 32,934.59 crore had been released by March 31, 2011.

The CAG said that the JNNURM guidelines had been deficient in giving adequate advisory to states regarding parking of funds and there was no uniformity in utilising interest earned on parked funds.

It noted that the utilisation certificates — an actual utilisation of grants — amounting to Rs 2,436.78 crore were pending as of May 2012.

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