Audit Reports | Principal Accountant General (Audit) Sikkim, Gangtok

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Compliance Performance

Sikkim

Audit Report 2008-09 Sikkim

Date on which Report Tabled:

Tue 30 Mar, 2010

Date of sending the report to Government:

Government Type:

State

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Sector Environment and Sustainable Development,Finance,Industry and Commerce,Agriculture and Rural Development,Art, Culture and Sports,Social Welfare,Social Infrastructure,Education, Health & Family Welfare,General Sector Ministries and Constitutional Bodies,Power & Energy,Transport & Infrastructure,Taxes and Duties

Overview

This Report contains 28 audit paragraphs and four performance reviews. There is a separate chapter on Integrated Audit of the Human Resources Development Department. According to the existing arrangements, copies of the draft audit paragraphs and draft performance reviews were sent to the Secretary of the Department concerned by the Accountant General (Audit) with a request to furnish replies within six weeks. Replies were not received from the departments concerned in respect of nine paragraphs. The State Government considered harnessing the huge hydro power potential through private sector investment with a view to turnaround the State's economy and avoid its dependence upon central transfers for development. With the liberalisation of Power policy by the Government of India, the State Government identified 35 hydro power projects with an aggregate installed capacity of 5,741.20 MW and invited the Independent Power Producers (IPPs) for development of projects since 2001-02.

Performance audit of Development of Hydro Power Projects by the State Government through Private Sector participation revealed that the State had neither finalised its hydro power policy nor prepared a time bound plan till date for implementation of the projects. Absence of a firm and well defined policy led to inconsistency in award of projects and lack of a well thought of revenue model resulted in loss of potential revenue. Besides, the State also did not take sufficient precaution against degradation of environment. Out of a total geographical area of 7,09,600 hectares, the estimated area to be brought under assured irrigation system was 86,000 hectares. As on 1 April 2005, the area under assured irrigation was 23,864.05 hectares and during 2004-09, an additional area of4,055.30 hectares could only be brought under assured irrigation.

Though the implementation of Minor Irrigation Scheme (MIS) in Sikkim did not suffer from any cost overrun, the programmes, however did not achieve its objective to increase the cultivable area and production due to improper survey, investigation, absence of planning for source development, supply of polluted water to agricultural fields, non formation of water user groups, absence of planning for ensuring availability of water during lean period, defunct channels awaiting repair, delay in completion of channels etc. Budgeting process was deficient in the absence of an effective mechanism for monitoring which resulted in improper surrender and supplementary provisions, rush of expenditure at the end of years. The State is yet to enforce implementation of Sikkim Irrigation Water Tax Act 2002 to avail cent per cent financial assistance from GOI and avoid huge revenue loss. Also, there was unfruitful expenditure on defunct schemes, avoidable expenditure on construction without design specification, unfruitful construction of MISs and inadequate benefit from construction of channels. The IFCD also has not taken action to evaluate the implementation to take remedial measures for improvement in the irrigational development to reduce the gap between creation and utilisation of potential, actual production and production envisaged.

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