Govt seeks CAG audit in transport subsidy scheme

The government has sought a Comptroller and Auditor General (CAG) audit into the transport subsidy scheme following complaints of irregularities in disbursing Rs 555 crore to the industries in hilly and remote areas.

The CAG audit has been sought by the Department of Industrial Policy and Promotion (DIPP) on the suggestion of the Planning Commission, an official said.

"On the suggestion of the Planning Commission, CAG has been requested to conduct a performance audit," the official said.

The transport subsidy scheme which has disbursed Rs 1,652 crore till November 30, was introduced in 1971 to promote industrial investment in the hilly, remote and inaccessible areas such as Arunanchal Pradesh, Manipur, Mehgalaya, Mizoram, Nagaland, Sikkim, Jammu and Kashmir, Himachal Pradesh, Uttarakhand and Darjeeling (West Bengal), besides Union Territories of Andaman and Nicobar Islands and Lakshadweep.

As much 90 per cent subsidy is paid on the transport costs of raw material and finished goods from and to designated rail heads.

The government has received complaints of misuse of the scheme which is operated through the state governments.

Of Rs 1,652 crore disbursed so far, the maximum of Rs 1,266 crore has been given to the industries in the North-Eastern states. Units in Himachal Pradesh, Jammu and Kashmir and Uttarkhand have been given Rs 359 crore.