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CAG raps NDA govt
Picks holes in sale of Centaur Hotels
Tribune News Service

New Delhi, May 6
A day after former Disinvestment Minister Arun Shourie dared the government to hold an open inquiry into the sale of two Centaur hotels sale, the Comptroller and Auditor General today presented its report which could snowball into another major controversy for the previous NDA government.

The CAG in its report presented in Parliament said that the sale of two Centaur hotels took place without the benefit of competition and that valuation and reserve prices in these transactions were not consistent to the practice followed by Disinvestment Ministry in other cases.

The report said that the sale of transactions of the Juhu Centaur and Airport Centaur hotels were finalised on the basis of single bids without the benefit of competition. “The efforts made to balance the need and urgency to sell the properties and to obtain the best possible price from the sale were not evident,” the report said.

Finance Minister P. Chidambaram had on Wednesday accused former Disinvestment Minister Arun Shourie of taking an “active interest” in the sale of Juhu Centaur Hotel. The government would await the CAG report on it, he had said.

Meanwhile Mr Arun Shourie reiterated that he was ready to face any inquiry in the sale of the hotels. He said he was ready to face any inquiry that the Prime Minister or Finance Minister might deem fit. “Even though the CAG has taken a view contrary to the view of the government on technicalities and procedure, I reiterate my offer to face any inquiry that the PM or the FM may deem fit,” he said.

The former minister said that an interesting feature that did not find mention in the CAG report was that at some stage the valuation of the Centaur hotel was put at Rs 246 crore but was mysteriously brought down to Rs 101 crore.

The CAG, in a severe criticism of the procedure and valuation process, said, “Assumptions made during valuation of the properties and fixation of reserve price of Airport Centuar were not consistent with the practice followed by the ministry in other cases. Repeated extensions and relaxation were allowed to the bidder of Juhu Cenaur to facilitate the sale,” it observed.

“Various relaxations allowed to the bidder and interventions by the ministry to facilitate the sale indicated inadequate efforts to mitigate the risk of transaction in a limited competition scenario,” the report said.

The CAG said expressions of interest were received in October 2000 from 20 parties for Juhu Centaur and 21 parties for Airport Centaur.


Says funds diverted for ‘India Shining’
Tribune News Service

New Delhi, May 6
The Vajpayee government today came under critical focus as the Comptroller and Auditor General held the NDA administration guilty of diverting funds and incurring unauthorised expenditure of Rs 63.23 crore for the “India Shining” media campaign.

“The Ministry of Finance did not obtain approval of Parliament before incurring an expenditure of Rs 63.23 crore on the media campaign”, the CAG pointed out in its report which was tabled in Parliament today.

“The action of the ministry in not obtaining prior approval of Parliament before incurring expenditure on the activity, which was a new service or instrument of service, was unauthorised”, the report stressed.

Tracing the expenditure, the report said that the ministry incurred the expenses by diverting funds though this activity was not contemplated in the annual Budget.

Giving details, the CAG said that an expenditure of Rs 63.23 crore was incurred by re-appropriating Rs 60 crore from sub-head ‘Cooperation with other countries’ to a sub-head ‘other expenditure under major head 3605 in demand No 31-Department of Economic Affairs for 2003-2004.

The Constitution of India clearly stipulates that no money should be withdrawn from the Consolidated Fund of India except under appropriation made by law, the CAG said.

“When need for expenditure on a new service not contemplated in the annual budget arises, a supplementary demand for grant should be placed before the Parliament for approval”, the CAG said giving reasons for its stricture.

Though the Ministry of Finance mooted in September, 2002, a proposal for launching a media campaign for highlighting the benefits of economic reforms, creating awareness and developing broad constituency among common people in favour of these reforms, but since the activity was a ‘New Instrument of Service’ the ministry was required to bring it to the notice of the Parliament before incurring any expenditure, the report said and added that “the ministry, however, failed to make any Budget provision in 2003-2004”.

The Empowered Sub-Group set up in September, 2003 under the chairmanship of Chief Economic Adviser, Ministry of Finance, for overseeing the implementation of the publicity programme decided that a full-fledged media campaign be launched and the expenditure met with sponsorship from various stakeholders in the economic reforms i.e. banks, financial institutions and the corporate sector, the report pointed out.

However, the Finance Ministry said in its defence that it had mentioned about the expenditure while presenting the demand.

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