₹85.75 crore interest subvention funds locked for 341 days, CAG finds

Who it concerns: Government of Union Territory of Jammu and Kashmir, specifically the Finance Department (State Taxes Department) and various PSUs including Jammu and Kashmir Bank Limited, Jammu and Kashmir IT Infrastructure Development Private Limited, Jammu and Kashmir State Power Development Corporation, and Jammu and Kashmir Projects Construction Corporation.

What the auditor found

• Delay of over five years in issuing Standard Operating Procedures (SOP) for GST return scrutiny, leading to minimal scrutiny and potential revenue loss.
• Unutilized interest subvention funds of ₹85.75 crore locked up for 341 days despite terms requiring immediate credit to beneficiaries.
• Ineligible interest subvention benefit of ₹59.21 crore extended to 39,136 accounts, including accounts excluded from the scheme (KCC and personal segment).
• Doubtful recovery of ₹104.51 crore by Jammu and Kashmir Bank Limited due to lack of adequate collateral and poor monitoring for M/s Zenica Cars India Pvt. Limited.
• Wasteful expenditure of ₹82.18 lakh due to the failure to make Jammu and Kashmir Asset Reconstruction Limited operational.
• Loss of interest of ₹2.65 crore to Jammu and Kashmir IT Infrastructure Development Private Limited due to parking of surplus funds in violation of board directives.
• Avoidable interest payment of ₹6.88 crore by Jammu and Kashmir State Power Development Corporation due to non-deposit of advance tax.
• Avoidable interest payment of ₹0.32 crore by Jammu and Kashmir Projects Construction Corporation due to non-deposit of advance tax.
• Recommendations include ensuring effective scrutiny based on risk analysis and fixing year-wise targets to pursue inconsistencies.

Also in the document

• CAG reported that ₹85.75 crore in interest subvention funds remained locked up for 341 days instead of being credited to eligible beneficiaries as required.
• CAG identified a doubtful recovery of ₹104.51 crore by Jammu and Kashmir Bank Limited, attributed to sanctioning credit without adequate collateral and poor monitoring.
• CAG noted that 34 out of 40 Government Companies under CAG's audit jurisdiction had not submitted their accounts for the year 2021-22 by the deadline of 30 September 2022.