CHAPTER 1
FINANCIAL MANAGEMENT

1.    Introduction

The scientific and technological research base of the country consists of Laboratories, Research and Development (R&D) institutions, in-house R&D establishments etc. covering several disciplines including nuclear science and space science.

Provisional figures : for years 1998-99 to 2000-01
Source : Statistics provided by Department of Science and Technology and Central Statistical Organisation

Expenditure on R&D activity as a percentage of Gross National Product (GNP) has been below one per cent. In 2000-01, it increased appreciably by 21 basis points. Expenditure on R&D in most developed countries is over two per cent of GNP while some developing countries spend around 0.5 per cent. The need to enhance R&D expenditure to reach a level comparable to developed countries is one of the more significant issues facing the country’s policy makers.

2.    Growth of in-house R&D units

Growth of the R&D units in the public and private sectors during the Plan Periods was as under:

*    Provisional figures
Source : Statistics provided by Department of Science and Technology

Although there was steep increase in R&D units in the industrial sector during the Sixth Five Year Plan thereafter there was a sharp decline.

The funding of Science and Technology programmes is mainly through the budgetary support given by the scientific departments/agencies of the Central Government. Of the total R&D expenditure (2000-2001), the share of Central Government including the public sector was 66.45 (Provisional figures) per cent, whereas the share of the private sector was 22.85 (Provisional figures) per cent. The State Governments’ share was only 10.70 (Provisional figures) per cent.

3.    Output indicators

There are two key indicators of output of R&D efforts viz. the number of patents sealed and research papers published in a country. Patents sealed and research papers published in a particular year in the areas of science and technology are indicative of the direction in which the research efforts of the country are progressing.

3.1    Patents

The number of patents sealed in India declined from 1890 in 1989-90 to 1318 in 2000-2001. The number of patents sealed by Indians declined from 519 to 399 in 2000-2001 vis-à-vis 557 during the previous year. Year-wise details of patents sealed in India during the period 1989-2001 are indicated in the chart.

Source : Statistics provided by Patent Office, Kolkata

The number of patents sealed in the name of foreign nationals in India continued to be much higher than those sealed by Indians during the period 1989-2001.

3.2    Research papers

The number of research papers published in India by research laboratories under the Central and State governments and in-house R&D units of public and private sector industries in various areas of science and technology had declined from 50469 papers in 1995 to 42891 papers in 2000.

Details of research papers published are as follows :

*    Provisional figures - Source : Department of Science and Technology
Source : Statistics provided by Department of Science and Technology

4.    Expenditure

Expenditure of major scientific departments/organisations, covered in this Report, during the year 2000-2001 in comparison to preceding two years is indicated in Appendix-I. The Departments of Atomic Energy, Space and Indian Council of Agricultural Research accounted for 65.26 per cent, 67.86 per cent and 66.79 per cent of total expenditure during 1998-99, 1999-2000 and 2000-2001 respectively.

The establishment expenditure of the various Ministries/Departments including two major autonomous bodies viz. Council of Scientific and Industrial Research and Indian Council of Agricultural Research and its percentage to the total expenditure during 2000-2001 is shown in the following table :

$    figures as provided by the concerned Ministries/Departments

It would be seen from the table above that the Ministries/Departments spent 12.48 per cent to 98.88 per cent of their total expenditure as cost of establishment.

4.1    Excess expenditure and unspent provisions under various Grant/ Appropriation

A summary of Appropriation Accounts of 2000-2001 in respect of the scientific departments/major scientific organisations,  is given below:

The total unspent provision was Rs 1309.03 crore, representing 10.22 per cent of the total provision of funds. Detailed examination of Appropriation Accounts of Department of Atomic Energy, Ministry of Environment & Forests and Department of Space, which accounted for 65.78 per cent of the overall unspent provision, revealed as under:

In three schemes executed under grant No.90 viz. Modernisation and replacement scheme for existing plant, Dovetailing 37 elements bundle of TAPS and Board of Radiation and Isotopes technology the unspent provisions ranged between 38 per cent to 100 per cent of the total provision during the years 1998-99, 1999-2000 and 2000-2001.

In two schemes executed under grant No.91 viz. Operation Expenses of Waste Management facilities at Tarapur and PFBR - Phase II Development of Indigenous capability for MA, the unspent provisions ranged between 35 per cent to 78 per cent of the total provision during the years 1998-99, 1999-2000 and 2000-2001.

In three schemes executed under grant No.24 viz. Taj Protection Mission, Environmental Commission & Tribunal and Eco-development around Important Protected Areas (IPAs) the unspent provisions ranged between 19 per cent to 100 per cent of the total provision during 1998-99, 1999-2000 and 2000-2001.

There were 52 per cent to 100 per cent unspent provisions under three schemes executed under Grant No.93 viz. Cryo Stage Development, G. SAT - 2&3 and Cryo Project during 2000-2001.

4.2    Adverse balances appearing in the Finance Accounts

The adverse balances are negative balances appearing under the heads of accounts where normally there can be no negative balance. These arise due to misclassification or excess refunds or non-reconciliation of accounts or due to some other reasons. Statement No.13 of the Finance Accounts of the Union Government for the year 2000-2001 revealed the following cases of adverse balances relating to Scientific Departments:

The adverse balance in the Department of Ocean Development has been continuing since March 1997. There has not been much improvement despite it being pointed out in the Reports of the Comptroller and Auditor General of India, Union Government (Scientific Departments) for the years ended 31 March of 1997, 1998, 1999 and 2000. In respect of Ministry of Environment and Forests, these were mainly proforma balances prior to formation of the Ministry (i.e. January 1985), which were transferred from Ministry of Agriculture. All these adverse balances require investigation and rectification.

5.    Audit of accounts of autonomous bodies

The Comptroller and Auditor General of India is the sole auditor of seven autonomous bodies under the Scientific Departments. Audit Reports are prepared on their accounts under sections 19(2) and 20(1) of the Comptroller and Auditor General’s (Duties, Powers & Conditions of Service) Act, 1971. The position of grants released to these autonomous bodies is indicated in Appendix-II.

In addition, the Comptroller and Auditor General of India may conduct supplementary/super-imposed audit of any of 53 other autonomous bodies which are substantially funded by the Government of India and whose primary audit is conducted by Chartered Accountants. The position of grants released to these autonomous bodies is indicated in Appendix-III.

Accounts of autonomous bodies, receiving grants and loans from the Ministries/Departments of the Government, are audited by the Comptroller and Auditor General of India under the relevant provisions of the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971.

6.    Outstanding utilisation certificates

Ministries/Departments are required to obtain certificates of utilisation of grants by the Ministry and Departments from the grantees i.e. statutory bodies, non-governmental institutions etc. indicating that the grants had been utilised for the purpose for which these were sanctioned and that, where the grants were conditional, the prescribed conditions had been fulfilled. 5432 utilisation certificates for grants aggregating Rs 659.09 crore were outstanding as given in Appendix-IV. Utilisation certificates in 3541 cases aggregating Rs 373.21 crore were outstanding for more than three years. These included 2033 cases aggregating Rs 136.49 crore where utilisation certificates were outstanding for more than 10 years. An analysis of outstanding utilisation certificates revealed that Ministry of Environment and Forests alone accounted for 68.51 per cent of these amounting Rs 451.51 crore. Other main defaulting Ministries/ Departments were - (i) Department of Ocean Development (Rs 60.97 crore), (ii) Ministry of Information Technology (Rs 120.29 crore), (iii) Ministry of Non-Conventional Energy Sources (Rs 18.15 crore).

7.    Follow up on Audit Reports

In its Ninth Report (Eleventh Lok Sabha) presented to Parliament on 22 April 1997, the Public Accounts Committee had recommended that Action Taken Notes (ATNs) on all paragraphs, pertaining to the Audit Reports for the year ended 31 March 1996 onwards, be submitted to them duly vetted by Audit within four months from the laying of the Reports in Parliament. A review of the position regarding receipt of ATNs on paragraphs included in various Audit Reports upto the period ended 31 March 2000 revealed that as of December 2001, the following Ministries/Departments (the details thereof are in Appendix-V) had not submitted the remedial/corrective ATNs on the following paragraphs :