Mumbai: CAG expresses displeasure over poor recovery of loan from co-op spinning mills

The Comptroller & Auditor General (CAG) in its report ended March 31, 2021, has expressed displeasure over the poor recovery of loans by the Maharashtra government from the cooperative spinning mills (CSM) under the scheme for providing long term loans to the backward class (scheduled caste). ''Out of Rs 195.88 crore due for recovery, an amount of Rs 191.97 crore was due for recovery till August 2021, as against which only Rs 1.10 crore was recovered (from one CSM) leaving a balance of Rs 190.87 crore. The poor recovery of loans which was outstanding for a period ranging from more than one year to nine years indicated a lack of vigorous and effective follow up for recovery of pending dues. Audit noticed that although the Social Welfare Commissioner had issued demand notices every quarter for recovery of loan to all the eight CSM, no action was taken for recovery of loan as arrears of land revenue or through the disposal of mortgaged assets as per the scheme. Reply to the Government (December 2021) was silent on the action taken to recover the loan as arrears of land revenue or through the disposal of mortgaged assets,'' it observed. The scheme has been implemented since the year 2000.

According to the CAG report, which was tabled by the minister of state for finance Sambhuraj Desai in the state assembly, as per the scheme, recovery of the loan was to commence two years after the date of disbursement of 90 per cent of share capital (disbursed by Co-operation and Textile Department) and loan for the project. ''The entire process of recovery was to be completed within six years from the commencement of recovery of the loan. The principal was required to be recovered in 16 quarterly instalments and interest in eight quarterly instalments. Audit noticed that out of 13 projects, in eight projects, a loan amount of ₹ 195.88 crores had become due for recovery and was required to be recovered fully between June 2016 to May 2024,'' it said.

Further, the government reply is not acceptable as documentary evidence of such verification was not on record and it also pointed towards the fact that the caste certificate of members of CSM had not been verified. ''Thus, the recovery of the loan under the scheme was poor and an amount of Rs 190.87 crore was pending for recovery for a period ranging from more than one year to nine years. The Social Justice and Special Assistance Department also did not safeguard its financial interest by levying interest on loan disbursed or by taking action for recovery of loan as per the scheme,'' observed CAG.