CAG pulls up Security Press over irregularities, safety lapse

In a report, the Comptroller and Auditor General (CAG) has accused the India Security Press, Nashik, of irregularities in the supply and production of stamps. ISP was also embroiled in the Telgi stamp paper scam.

The report said the ISP confined its role to that of a printer and limited its verification of authenticity of stamps to those referred by the investigation agencies only.

The report tabled before the Parliament last week states that the stamps printed during an eight-year period from 1996 to 2004 were only 46 per cent of the total indents.

Cumulatively, during eight years (1996-2004), the ISP produced only 12,783 lakh sheets as against the total indents of 27,723 lakh sheets.

Also, the ISP did not review the reasons for its low production. The category and denomination-wise analysis of production of stamps from 1995 to 2003 also confirmed that there was no correlation between the indents, production and supply.

Despite underutilisation of the capacity and large number of unmet indents, the ISP did not increase its output. The machinery was used for only around five hours and fifteen minutes as against the stipulated nine hours per shift.

The reasons for unutilised machine hours remained unexplained on account of the absence of log books of machines, said the report.

There was a major variation in the supply of stamps also. The supply was only 11,833 lakh sheets during 1996 to 2004 as compared to the indent of 27,723 lakh sheets, leading to a shortfall of about 57 per cent.

A sample check of documents related to consignments in various states disclosed short supplies to the aggregate value of Rs 1453.75 crore and excess of Rs 687.89 crore in during 1996 to 2003. Large number of cases of loss/theft of stamp papers in transit through railways were also reported during 1995-2000 leading to an aggregate loss of Rs 25 crore.

The CAG also pointed out that the ISP had no effective control over the actual quantity of security paper manufactured by the private paper mills or the manufacture, custody and the use of "dandy rolls". The dandy roll is an equipment that introduces security features in the stamp papers.

The ISP's decision to permit representatives of the successful bidder to be present for the disposal of the printing machine during its dismantling was also questioned.

It entailed the risk of the machine being reassembled for counterfeit printing. Similarly, the ISP was negligent while disposing the printing and perforating machine to the same vendor, which further heightened the chance of its misuse. The machines were sold to M/s Unique Enterprises without assessing the risks associated with the sale to the same agency, said the report.

A report by the Comptroller and Auditor General (CAG) on the India Security Press (ISP), Nasik, has slammed the Security Press for the lapses in the procurement and disposal of of "dandy roll" "" a device used for introduction of security watermark on stamp paper during the course of its manufacture.

Though designed by the ISP, the equipment is manufactured by private producers which are small scale industrial units. Out of the nine mills, which had custody of 53 rolls, many were not working for ISP since years.

The Press had not carried out physical verification of 21 rolls which were lying in seven mills after 1988-89. Moreover, during the last inspection carried out in Titragargh Paper Mills, Kolkata in 1996, only 12 of the 26 rolls were available. The missing 14 rolls were never traced nor were the 12 available ones seized by the ISP.

The CAG in its recommendations has said that the ISP should introduce new security features in non-judicial adhesive stamps. It has also suggested that the machinery must be dismantled and crushed before sale as scrap.

The ISP must institute a system to rationalise the indents received from various entities by changing it from quarterly to half-yearly with a three yearly rolling indent.

It should introduce a system of co-ordination with indentors to address erratic indents. It should establish a printing plan consistent with indents along with embedded comprehensive performance information system, the CAG report has observed.

The CAG has also suggested that there should be regular surveillance by the Intelligence Bureau and setting up of a vigilance-cum-surveillance cell at ISP and replacement of the existing security arrangement with the CISF.

The report asserts that verification of actual implementation of remedial measures in ISP could not be undertaken. The General Manager of the Press did not furnish any information about any of move initiated except in regards of CISF, and forecasting the indent for three years, which had been introduced.