42 UT Public Sector Enterprises Under Scanner; Rs 461.67 Crore NABARD Funds Remain Unutilised
Avinash Azad
The Comptroller and Auditor General (CAG) of India has flagged widespread financial and administrative deficiencies in Jammu and Kashmir, with only 32 of 263 NABARD-funded projects due for completion having been finished by March 2023.
The findings are part of CAG’s, Report No. 3 of 2026, Composite Audit Report (CAR) on Civil and Public Sector Enterprises, tabled in the Jammu and Kashmir Legislative Assembly on Wednesday, the last day of the autumn session.
According to the report, 231 of the 263 projects were either incomplete or had not started as of March 2023. Against Rs 844.17 crore released between 2018 and 2023, only Rs 382.50 crore, around 45 per cent, was spent, leaving Rs 461.67 crore unutilised.
The CAG said delays undermined the intended objectives of improving irrigation, flood management, drinking-water supply and rural road connectivity.
The Union government had consented to loans of Rs 3,900 crore from NABARD during 2018-19 to 2022-23. However, the Jammu and Kashmir administration availed only Rs 2,316.37 crore, or 59 per cent, of the approved amount.
The report noted that NABARD’s disbursement ranged between 28 per cent and 84 per cent of the sanctioned loans across different tranches, primarily because of the slow progress of works. In several cases, loans lapsed because prescribed timelines were not followed.
The CAG observed that project planning and prioritisation by the executing departments were weak. Baseline data and planning frameworks required under NABARD guidelines were either unavailable or not effectively used while selecting projects.
Several projects were sanctioned or executed without ensuring basic prerequisites, including availability of encumbrance-free land, forest and other statutory clearances, identification of viable water sources and approval of technically sound detailed project reports.
The audit also pointed to diversion and misutilisation of funds, defective DPRs, improper site selection, inadequate contract management and delays in releasing funds.
As of March 31, 2023, Jammu and Kashmir had 42 public sector enterprises under the CAG’s audit jurisdiction. Of these, six were inactive and 36 were active. While 11 enterprises were profit-making, 20 reported losses amounting to Rs 252.53 crore in 2022-23. The net worth of 14 enterprises had been completely eroded by accumulated losses. The combined reported profit of the enterprises increased to Rs 1,286.79 crore in 2022-23 from Rs 566.10 crore in 2021-22. However, only Jammu and Kashmir Bank Limited had declared or paid a dividend.
The CAG recommended that the administration take an early decision on liquidation of inactive enterprises and initiate corrective measures to improve the performance of loss-making public sector companies.
The audit raised serious concerns over delays in presenting financial statements for audit. Of the 34 enterprises whose accounts for 2022-23 were due, only four had submitted their financial statements for CAG audit by September 30, 2023.
The accounts of 19 enterprises had been in arrears for three years or more. The accounts of the Jammu and Kashmir Road Transport Corporation and the Jammu and Kashmir and Ladakh Financial Corporation were also pending for two years or more. The audit of Jammu and Kashmir’s Integrated Financial Management System (JKIMFS) found major technical, administrative and security deficiencies.
The system, initiated in March 2010, was intended to provide comprehensive financial management and real-time monitoring of the government’s fiscal position. However, as of March 2023, only four of the 12 proposed modules were fully operational, resulting in a delay of more than a decade in implementing the complete system. The CAG said Jammu and Kashmir lost central assistance of Rs 11.88 crore because the Detailed Project Report was not revised as required and prescribed milestones for treasury computerisation were not achieved. The report further highlighted weak logical access controls, inadequate password recovery mechanisms, absence of complete transaction logs and lack of a comprehensive disaster recovery and business continuity plan.
