CAG finds lapses in monitoring expenditures by MSME ministry

Government auditor CAG has found lapses on part of the MSME Ministry including deficiencies in internal monitoring system and non-disclosure of expenditure incurred on loans and advances, among other issues.
"There is an urgent need to improve the existing monitoring and reporting mechanism of the expenditure on grants-in-aid, which is released by the government of India to various bodies and authorities for delivery of public goods and services," the CAG report on accounts of the Union Government for 2013-14 concluded.
The analysis revealed that during 2011-12 to 2013-14, the Ministry released recurring grants-in-aid of Rs 4,507.86 crore to three institutions -- Coir Board; National Small Industries Corporation; and Khadi and Village Industries Commission; without taking into account the unspent balance of Rs 438.45 crore already available with these institutions.

It also found non-disclosure of expenditure incurred on loans and advances in the utilisation certificates.
During the years 2012-13 and 2013-14, grants-in-aid of Rs 1,611.75 crore and Rs 1,454.07 crore were released to Khadi and Village Industries Commission and Coir Board respectively.
However, these organisations while furnishing the utilisation certificates in respect of the grants for the year 2012-13 did not disclose the loans and advances of Rs 1,774.84 crore disbursed on March 31, 2013 out of the grants received.
Moreover, during 2011-12 to 2013-14, grants-in-aid aggregating Rs 559.03 crore were released to KVIC and Coir Board but no MoU was entered into by the Ministry with grantee bodies although budgetary support of over Rs 5 crore per annum was given to each of them.