Financial Daily from THE HINDU group of publications
Thursday, Feb 26, 2004
Financial Daily from THE HINDU group of publications Thursday, Feb 26, 2004 |
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Info-Tech
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Telecommunications CAG raps BSNL for functional flaws Our Bureau
New Delhi , Feb. 25 THE Comptroller and Auditor General of India (CAG) has detected serious functional flaws in Bharat Sanchar Nigam Ltd (BSNL) with the financial implication in respect of performance reviews being quantified at Rs 1,186.56 crore. These functional flaws pertain to loss/over payment/short recovery amounting to Rs 739.40 crore, infructuous expenditure of Rs 109.90 crore, idle/unproductive expenditure of Rs 127.68 crore, excess expenditure in violation of rules of Rs 17.12 crore and avoidable payment/expenditure of the order of Rs 116.84 crore, the CAG said in a recent report on telecommunications sector of the Union Government (Commercial). The report said as on March 31, 2003, the entire paid-up equity share capital of Rs 5,000 crore and preference share capital of Rs 7,500 crore of BSNL was treated as investment by the Government. Besides, another amount of Rs 7,501 crore has been treated as loan from the Government. While no interest on loan of Rs 7,500 crore was paid to Government due to exemption/moratorium on the same enjoyed by BSNL, the loan of Rs 1 crore was payable along with interest to the Government. At the end of March 2003, BSNL had a network of 36,136 telephone exchanges with an equipped capacity of 457.66 lakh lines. Out of the equipped capacity, 359.33 lakh telephone connections, i.e., 79 per cent were given, though number of persons on the waiting list was 18.07 lakh. For the year ended March 31, 2003, CAG said BSNL earned Rs 25,293.15 crore from its services, spread over 24 telecom circles. The profit before tax was Rs 2,657.90 crore and after providing for tax, the net profit stood at Rs 1,444.45 crore. According to CAG, the arrears of telephone revenue of Rs 3,596.86 crore came down to Rs 2,684.18 crore at the end of June 2003 for the bills issued up to March 2003. For the bills issued up to March 2003, an amount of Rs 1,861.21 crore (as of July 1, 2003) was outstanding for one or more years, which constituted 69.34 per cent of the total outstanding revenue of Rs 2,684.18 crore. A category-wise scrutiny of outstanding revenue reveals that out of the total outstanding amount of Rs 2,684.18 crore, 92.29 per cent was outstanding against the private subscribers, 1.53 per cent against the Central Government departments and 6.18 per cent against various State Governments. CAG said the amount as well as the proportion of outstanding bills against private subscribers was persistently increasing every year. CAG noted the revenue arrears overdue for collection in respect of telegraph circuits had gone up from Rs 159.56 crore in 1999-2000 to Rs 282.52 crore in 20022-03, while those of telex/in telex charges reduced marginally from Rs 19.30 crore to Rs 17.21 crore during the same period. A performance review relating to BSNL by CAG shows a projection by the company indicated that it incurred an annual recurring expenditure of Rs 556 crore on microwave media and earned a revenue of only Rs 135 crore, resulting in annual loss of Rs 421 crore. "Lack of clear and uniform policy towards the desired shift in requirement due to technological changes led to persistence with microwave medium, idling of media, incurring avoidable expenditure on maintenance and loss of revenue due to delay in providing leased circuits," the CAG said. Notwithstanding the fact that coaxial cables did not carry any traffic, 7881.27 km of coaxial cables worth Rs 42.50 crore laid in southern, eastern and western regions were not recovered, the report said.
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