CAG reports poor showing of multiple Govt. departments in Tamil Nadu

by our Special Correspondent

The Comptroller and Auditor General of India in it’s audit report tabled in the Assembly earlier this month reports that Tamil Nadu’s government undertakings have sustained losses running into crores. Notably, it released its assessment of electric power generation undertaking TANGEDCO (Tamil Nadu Generation and Distribution Corporation; year ended March 31, 2019), liquor undertaking TASMAC (Tamil Nadu State Marketing Corporation; year ended March 31, 2018) and the TICEL Bio Park (Tamil Nadu Industrial Development Corporation Bio Park; year ended March 31, 2018) underlining several areas of improvement.

In its account relating to TASMAC, the CAG reported inefficiencies in management that had an impact on the venture’s losses. For instance, the government exchequer was reported to have sustained a loss of Rs. 18.67 crores due to mismanagement of license agreements and a further loss of Rs. 19 lakhs in agency commission during the license extension period from July 2016 to November 2017, encompassing bars related to 326 retailing shops.

As for the TICEL Bio Park, the CAG report stated that the undertaking left idle for more than four years lab facilities worth Rs. 17.32 crores, as the appropriate manpower to run them was not provided. It also mentioned that the TN Cement Corporation had non-recoverable amounts of Rs. 4.49 crores due to the extension of credit facility without security.

In its assessment of TANGEDCO, the audit reported weakness in the management of coal supply relating to efficient movement of the commodity as well as the undertaking’s quality assessment system. The report also flagged data disparities and lack of reconciliation in record keeping, which impacted the efficiency of coal transportation and the ability to enforce corrective measures. For instance, the report mentions that TANGEDCO faced a shortfall in supply and had to import coal to make up for it. However, it did not impose a penalty on coal companies per the fuel supply agreement (FSA). The CAG reports that TANGEDCO’s coal management has resulted in wasteful expenditure of over Rs. 4,000 crores during the period 2014-2019.

In addition, the CAG also reported inefficiencies in the Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB), estimating that only 52 per cent of sewage generated in the Chennai Metropolitan Area is being collected by the existing system, resulting in approximately 24 crore litres of raw sewage draining into the Cooum, Adyar River and Buckingham Canal on a daily basis. The audit also reported that 31 of 42 areas added to the Greater Chennai Corporation in 2011 were left unequipped with an underground sewerage system. It also pointed out that five sewage treatment plants (STPs) had no biogas plants, while those at three STPs were not functional; this meant the release of untapped methane gas into the atmosphere amounting to 57 lakh cubic metres per annum, resulting in an opportunity cost of saving crores on electricity bills.

When all of the above are taken together it is quite clear that there are considerable loopholes to be plugged. These if done can shore up the State’s finances which are already described as being parlous. While this will not bring in additional revenue it will at least ensure that our losses are minimised. Such a step is of the greatest necessity given that the newly elected State Government has also flagged considerable fall in revenue. The State’s finance minister has repeatedly been highlighting this as a cause of concern. He has also been promising a white paper on the state of TN’s finances, which is slated to be made public in the ongoing assembly session. It’s findings we are sure will be fraught with interest.

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