the Business behind agriculture subsidies


9 simple ways to make sure the subsidies never reach the beneficiary without getting caught. And no one gets caught because its not discussed on #AIB (All India Bakchod). If it didn’t happen on AIB it never happened – If it was not discussed on AIB it will never be scrutinized. Parliament is not the place for such discussions or debates

1. Don’t give loans to eligible people: Out of 80,299 accounts granted debt waiver or debt relief, 8.5% of cases, the beneficiaries were not eligible.

2. Grant loans but for ineligbible purposes: Almost $20.50 crores was on account of claims being admitted for ineligible purposes or claims pertaining

3. Become the middle man: A private scheduled commercial bank have received reimbursement for loan amounting to $164.60 crore extended to Micro Finance Institutions in violation of the guidelines

4. Tamper documents: In 2,824 cases, with claims amounting to 8.64 crores, there was prima facie evidence of tampering, over-writing and alteration of records

Department of Financial Services accepted the reimbursement claims of RBI in respect of Urban Cooperative Banks amounting to 335.62 crores despite the total number of beneficiaries not being indicated

5. Claim excessive charges: 6392 accounts, certain charges (interest in excess, unapplied interest, legal charges, inspection charges) amounting to 5.33 crores were to be borne by the lending institutions but were claimed from the government

6. Don’t follow procedures: After extending benefit under the scheme, the banks were to issue a certificate and obtain an acknowledgement from the farmer, so the farmer could become eligible for fresh loans. This was never done

7. Maintain no records: After the issue of refinance, records of all beneficiaries receiving loans were to be maintained, but this was never done.

8. No monitoring mechanisms in place: The department of finances was completely dependent upon the nodal agencies for monitoring the compliance of its instructions. However nodal agencies were relying on certificates and data of lending institutions without conducting any independent verification

9. Be ruthless: 1,564 cases were found where farmers were deprived of their rightful benefits of 1.91 crores

The agricultural debt waiver and debt relief scheme was launched in 2008 to address the problems and difficulties faced by the farming community in repayment of loans taken by them and in helping them qualify for fresh loans. This was to benefit the small/marginal farmers covering all the

  • loans disbursed between 1 April 1997 and 31 March 2007
  • Overdue as on 31 Dec 2007
  • Remaining unpaid up to 29 Feb 2008

At the government of India level, the Department of Financial services (DFS), Ministry of Finance, was the apex authority responsible for administration and implementation of the scheme.

Source: CAG Audit report http://www.saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_reports/union_performance/2013/Civil/Report_3/Chap_3.pdf

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