Audit reveals irregularities of Rs.8 bn in defence spending

March 15th, 2008 - 12:42 am ICT by admin  


New Delhi, March 14 (IANS) India’s audit watchdog has found irregularities of a staggering Rs.8 billion ($199 million) in defence expenditure, saying the money was improperly allocated or should not have been spent at all. In his report for 2006-07 tabled in parliament Friday, the Comptroller and Auditor General (CAG) has faulted the Indian Air Force (IAF) for irregular expenditure of Rs.4.76 billion, the Coast Guard for Rs.2.21 billion, the Indian Navy for Rs.340 million, the Indian Army for Rs.550 million, and the defence ministry for Rs.350 million.

“The cases mentioned in the report are among those which came to notice in the course of audit during 2006-07 and early part of 2007-08 as well as those which came to notice during earlier years but could not be included in the previous reports,” the CAG said in his preface.

In the case of the IAF, the CAG termed as “avoidable” the purchase of a third Boeing Business Jet (BBJ) for ferrying VIPs at a cost of Rs.3.12 billion.

Despite spending over Rs.9.97 billion the three aircraft “will not be used for international travel, necessitating the use of Air India aircraft with all its adverse consequences”, the report noted.

This apart, the acquisition process “deviated from laid down procedures and well recognised norms of propriety. Supplies valuing $50 million were contracted without the benefit of competition. Besides, the acquisition of the aircraft and self protection suite was inordinately delayed, leading to a total cost escalation of $19.70 million”, the report said.

The IAF has also been faulted for the “avoidable procurement” of 44 aircraft gearboxes at a cost of 1.64 billion.

In the case of the Coast Guard, the CAG has faulted it to releasing payment of Rs.2.21 billion to a private Indian shipyard for constructing three pollution control vessels as this was “not commensurate with the milestones specified”.

“The acquisition process followed by Coast Guard head quarters lacked transparency and deviated from prescribed purchase procedures,” the report noted.

The Indian Navy was faulted on two counts. In the first, the CAG found it fault in accepting guns worth Rs.280 million, which was “improper” as the weapon platform was “incomplete” without a proper aiming system.

The navy had also wrongly spent Rs.60 million in purchasing spares “even though there was no demand outstanding for them”.

The CAG report hauls up the Indian Army for not laying down technical specifications for procuring special clothing for troops deployed on the Siachen Glacier, as a result of which clothing worth Rs.290 million was rejected.

The report also said the procurement of 350,000 superior quality blankets from non-approved sources “at higher rates on grounds of urgency” resulted in extra expenditure of Rs.90 million.

Not only did the blankets not reach the troops in time, but they “were also found to be of inadequate warmth”, the report said.

It also indicted three lieutenant generals who headed three important army commands for misusing their special financial powers meant for procuring items of operational urgency to purchase goods worth Rs.110 million “which were not meant for operational use”.

The CAG also faulted the army for accepting faulty ammunition worth Rs.150 million in two separate deals.

The report finds fault with the defence ministry for procuring 209 bullet proof vehicles for Rs.350 million, “of which 200 vehicles were reported defective by the users.

“Besides compromising safety, army HQ, citing urgency of requirement, favoured the procurement of vehicles manufactured by a particular firm,” the report said.

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