Audit uncovers lapses in tractor subsidy disbursal in four districts of Himachal

The Comptroller and Auditor General (CAG) has uncovered excess disbursement of subsidy worth Rs 4.61 crore under the Centrally Sponsored “Sub-Mission on Agricultural Mechanisation” (SMAM) scheme in Himachal Pradesh, highlighting serious procedural lapses in the implementation of its tractor assistance component. The findings, part of the CAG report for the financial year ending March 2022, were tabled in the state Assembly last week by Chief Minister Sukhvinder Singh Sukhu.

The scheme, overseen by the Directorate of Agriculture, is designed to promote mechanisation among small and marginal farmers by offering financial support for the purchase of agricultural machinery. Under the SMAM guidelines, beneficiaries are categorised into two groups — Scheduled Caste/Scheduled Tribe farmers, women, small and marginal farmers and those from North-Eastern states; and a general category comprising all other farmers. Subsidy rates also vary depending on whether the tractor is a two-wheel drive (2WD) or a four-wheel drive (4WD), with financial assistance capped either as a percentage of the machine’s value or at a fixed maximum limit.

A snapshot of the lapse

A CAG audit has revealed a Rs 4.61-crore excess payout under the SMAM tractor subsidy scheme in Himachal Pradesh, exposing a clear breach of revised norms introduced in 2018-19. District authorities continued using

outdated subsidy rules, leading to inflated assistance for 1,005 beneficiaries across four districts. Individual overpayments ranged from Rs 6,000 to Rs 50,000

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A departmental circular prescribing uniform limits further deepened the mismatch with central guidelines. While the Agriculture Directorate admitted the lapse, the government has yet to formally respond. The CAG has called for recovery of excess funds and strict accountability to prevent such procedural failures

While uniform subsidy rules were applicable until 2017-18, the Centre introduced differentiated norms for 2WD and 4WD tractors beginning 2018-19. However, the audit found that district authorities failed to adopt the revised structure and continued applying the older uniform rates. This resulted in inflated subsidy calculations and payouts.

In four test-checked districts, auditors examined records for 2021-22 and observed that Rs 29.71 crore had been released to 1,005 beneficiaries for 2WD tractors, despite eligibility amounting to only Rs 25.10 crore. The discrepancy led to overpayments ranging from Rs 6,000 to Rs 50,000 per beneficiary. The audit also noted that a departmental circular prescribing a 50% subsidy or a maximum of Rs 3 lakh deviated from the updated guidelines, compounding the irregularities.

The Director of Agriculture acknowledged the lapse in May 2022, but the State Government’s formal reply had not been submitted to the CAG as of July 2024.

Calling for corrective measures, the audit recommended recovery of excess subsidies and fixing accountability for non-compliance. It also urged the government to tighten internal controls to ensure strict adherence to operational guidelines in the future.