The Comptroller and Auditor General (CAG) of India has flagged discrepancies that had financial implications worth ₹2,507.6 crore across 37 Central Public Sector Enterprises (CPSEs).

These CPSEs fall under 11 Ministries/Departments and the 54 individual observations have been highlighted in the CAG report on Union Government (Commercial)-Compliance Audit Observations.

Airports Authority

A CAG statement said that the audit reviewed revenue generation and realisation activities in Airports Authority of India (AAI) over a period from 2013-2014 to 2017-2018.

“The Audit noticed deficiencies in internal control mechanism in revenue management, namely, non-compliance of credit policy and provisions of Finance Manual, which resulted in short collection of Security Deposit of ₹152.37 crore, non-charging of interest from defaulting parties of ₹78.24 crore and non-realisation of dues of ₹11.95 crore from airlines ceased operations,” the CAG said.

The CAG said that Passenger Service Fee (Security Component) recovery had not kept pace with the mounting expenditure as a result AAI had a deficit of ₹702.88 crore for the period 2013-2014 to 2017-2018 which was met by AAI from its own sources of revenue. The Non-recovery of dues of ₹2,411.73 crore from Air India Group and non-claiming of interest of ₹624.87 crore as agreed in the Memorandum of Understanding were also flagged by the CAG.

New India Assurance

Reporting on the discrepancies and inefficient market assessment of another CPSE, the CAG said that New India Assurance Company Limited had issued a Master Package Policy to Appsdaily Solutions Private Ltd to cover the risk undertaken at the time of sale of mobile handsets with coverage of fire and allied perils, theft, burglary and accidental damages.

“CAG observed that the Company while issuing the policy neither ensured the existence of insurable interest nor got the actuarial valuation done, also the policy was renewed without getting the approvals of the competent authorities. Thus, imprudent underwriting and lack of proper risk assessment, led to a loss of ₹91.32 crore on account of the settlement claims,” the statement said.

India Oil

Another PSU facing the CAG’s ire was IndianOil. The CAG said, “Audit observed that Indian Oil Corporation Ltd (IOCL) paid entry tax to the extent ₹528.01 crore for transfer of High Speed Diesel Oil and Motor Spirit from its Barauni Refinery/Terminal to Patna Terminal through pipeline for the retailers/direct customers and also for OMCs during the period from 2008-2009 to June 2014.”

“Though the above entry tax was un-adjustable, IOCL, however, recovered ₹187.25 crore of the above un-adjustable entry tax from the consumers in the State of Bihar with an expectation of recovering the balance amount of un-adjustable entry tax by December 2019. Audit thus noted that the action of IOCL towards shifting the burden of avoidable expenditure of entry tax on the consumers was unjustified and inequitable,” the statement added.

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