Modi Gets CAG Rap on Knuckles for Favours to Large Corporates

Pegs losses to the exchequer at . 580 crore due to ‘undue’ favours to large corporates


The Comptroller and Auditor General of India (CAG) has come down heavily on the Gujarat government and state Public Sector Undertakings for causing a loss of nearly . 580 crore to the exchequer by bestowing ‘undue’ favours to large corporate entities.

The major industrial houses to whom the Narendra Modi government played the benefactor included Reliance Industries Ltd (RIL), Essar Steel and Adani Power Ltd (APL), the report for year ended March 31, 2012, said.

The government auditor’s report, tabled in the state assembly yesterday, also said the state government tweaked rules to grant land to automaker Ford India and engineering and construction major Larsen and Toubro resulting in loss of revenue.

“Gujarat State Petronet Ltd (GSPL) was responsible for deviating from the agreed terms of recovery of gas transportation charges from the specified entry point of the company’s pipeline network and this led to passing of undue benefit of . 52.27 crore to RIL,” the report said.

CAG was of the view that GSPL had failed to safeguard its own interest and passed on undue benefit to RIL.

Similarly, it noted that Gujarat Urja Vikas Nigam Ltd (GUVNL) did not adhere to terms of the Power Purchase Agreement (PPA), which led to short recovery of penalty of . 160.26 crore and passing of undue benefit to Adani Power Ltd (APL).

The main Opposition Congress promptly utilised the CAG report to attack the Modi government, alleging a “collusion” between the state dispensation and corporate houses.

“We have been raising the issue of collusion between corporate houses and the state government at every forum. The corporate houses get undue favours from the state government and in turn they praise the Modi government,” Congress spokesman Manish Doshi said. The state government, however, sought to downplay the issue, saying what the government auditor had noted was “not a scam but just irregularities”.

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