CAG finds anomaly in crop loan interest subvention claims

Noticing discrepancies in crop loan interest subvention claims in Odisha, Comptroller and Auditor General (CAG) said Odisha State Cooperative Bank failed to adhere to the guidelines and claimed excess interest subvention of Rs 263.55 crore.
The cooperative bank "did not adhere to the guidelines of Government of Odisha and claimed excess interest subvention of Rs 263.55 crore and of this claims, the government has already paid Rs 226.27 crore", CAG said in its report on Economic Sector for the year ended March 2015.
In pursuance of the decision of central government and Odisha government, OSCB, District Central Cooperative Bank (DCCB) and Primary Agriculture Cooperative Societies (PACS) were to advance crop loans to borrowers at seven per cent interest per annum, said the CAG report which was tabled in the state Assembly today.

As per Odisha Government's direction, crop loans were disbursed at five per cent interest per annum from Rabi 2008 onwards, it said adding the Centre also provided interest incentive to farmers who repaid their crop loan in due time.
However, scrutiny of records for the years 2010-11 and 2011-12 showed that non-deduction of interest collected from farmers on crop loans from the cost of funds for claiming interest subvention from Odisha government resulted in excess claim of Rs 151.19 crore, the report said.
Out of this amount, Rs 113.91 crore had already been received by Short Term Cooperative Credit Structure (STCCS), the report said.

Similarly, scrutiny of records revealed that during 2012-13 and 2013-14, interest subvention of Rs 112.36 crore was claimed by OSCB in excess of actual dues for the period beyond March and June for Kharif and Rabi season loans respectively, it said adding the state government had also released the claims.

The CAG report said, due to non-issue of "Annewari" certificate (crop damage report) by the district collectors and government after natural calamities in the state, farmers were deprived of relief.
After cyclone 'Phailin' of October 2013, farmers were deprived of relief assured by state government for conversion of short term crop loan of Rs 1291 crore into medium term crop loan as per NABARD norm as crop damage report had not been received except from Balasore district, it said.

Similarly, farmers were deprived of relief available under the scheme of NABARD after cyclone and unseasonal heavy rains in December 2010 due to non declaration of 'Annewari' scheme by district collectors, it said.