12% NABARD projects completed in J&K, Rs 461.67 crore unutilised: CAG

A performance audit by the Comptroller and Auditor General (CAG) has revealed significant delays and underutilisation of funds in NABARD-funded rural infrastructure projects in Jammu and Kashmir, with only 32 of 263 projects due for completion having been completed by March 2023.

The audit found that against a loan assistance of Rs 3,900 crore consented by the Centre under the Rural Infrastructure Development Fund (RIDF), Jammu and Kashmir availed Rs 2,316.37 crore. Of the Rs 844.17 crore released during 2018-23, Rs 461.67 crore remained unutilised.

The audit on the execution of works under NABARD-RIDF by the Public Works and Jal Shakti Departments covered the period from April 2018 to March 2023 and examined whether project selection and implementation processes were adequate and effective.

According to the report, National Bank for Agriculture and Rural Development (NABARD) disbursements ranged between 28 per cent and 84 per cent of sanctioned loans across different tranches, mainly due to slow progress of works. In several cases, sanctioned loans lapsed because prescribed timelines were not adhered to.

The audit also pointed to lapses by the Finance Department in managing mobilisation advances, including delays in release to implementing departments, non-release in some cases and excess disbursement in others. Instances of non-utilisation of mobilisation advances by executing agencies were also reported.

“These deficiencies adversely affected cash flow and the timely execution of projects,” the report noted.

The CAG observed weaknesses in project planning and prioritisation across departments. Baseline data and State/UT-level planning frameworks envisaged under NABARD guidelines were either absent or not effectively utilised. Mandatory requirements, including availability of encumbrance-free land, forest and statutory clearances, viable water sources and technically sound DPRs, were often not ensured before project sanction or execution, leading to stalled, abandoned or foreclosed works.

The report further highlighted systemic deficiencies in project execution, including delays in fund release, non-commencement of works, diversion and misutilisation of funds, execution without technical sanction, defective DPRs, improper site selection and inadequate contract management.

Monitoring and inspection mechanisms were found to be weak, with periodic field inspections either not conducted or inadequately documented. As a result, only 32 projects, accounting for nearly 12 per cent of the 263 projects due for completion by March 2023, were completed, while the remaining 231 were either incomplete or yet to commence.

The audit noted that against the total release of Rs 844.17 crore during the audit period, expenditure stood at only Rs 382.50 crore, leaving 55 per cent of the funds unutilised. The yearly unspent amount ranged from 4 per cent to 72 per cent.

The CAG concluded that the intended objectives of irrigation and flood management, safe drinking water supply and improved rural road connectivity were not achieved within the envisaged timelines. It recommended strengthening institutional planning, financial discipline, inter-departmental coordination, technical scrutiny and monitoring mechanisms to ensure effective utilisation of NABARD assistance and timely delivery of benefits.