CAG Report

On Tax

• In May 2006 CAG reported found nearly 700 cases of major irregularities involving under-assessment of direct taxes totalling nearly Rs 3,500 crore during 2004-05 and expressed concern over the delay in responses by Income Tax authorities.
• The Comptroller and Auditor General of India in its audit of all taxes calculated by the Central Board of Direct Taxes during 2004-05 observed a total of 15,874 cases of under-assessment involving a tax effect of Rs 6,522 crore.
• It also noted 112 cases of over-assessment with a tax effect of Rs 144 crore during 2004 05, according to the CAG report submitted in Parliament.
  

Defence Deals

• In May 2006 Comptroller and Auditor General (CAG) pulled up the government for not exercising care in negotiating huge armament deals with Russia , which even today is one of the major weapons and systems supplier to India .
• Be it the Rs 6,500 crore deal for purchase of Sukhoi-30 multi-role fighters signed in 1996, or Rs 3,000 crore deal to buy T-90 Main Battle Tanks concluded in 2001 or even the earlier agreement to acquire T-72M tanks, the country's financial watchdog said, were all flawed.
• Failure in freezing cost parameters, CAG has pointed out, has led to almost 100 per cent cost escalation in Sukhoi project and manufacture of the fighter indigenously is costing Rs 28.60 crores more than imports.
• Similarly India was to commence assembly and supply of 186 of the latest T-90 tanks by March 2005 and till date only 85 tanks had been delivered as supply of kits was not forthcoming as these had not been time bound in the original contract.
• On T-72 tanks, in spite of the TOT, there were heavy shortfalls in production of these tanks and even in their overhaul and upgradation. 

  Interiors of VIP jets

  • CAG has taken the Ministry of Defence to task for an exorbitant expenditure of Rs 127 crore entailed on interiors and in-flight entertainment in five jets.
  • CAG, in its latest report, has questioned the basic necessity of procuring VIP executive jets by the Air Force
  • The aircraft were procured last year from Embraer of Brazil for an aggregated cost of Rs 712.51 crore.
  • Of these, four were meant for the IAF’s Delhi-based Communications Squadron, while the remaining aircraft, valued at Rs 141 crore was for the Border Security Force.
  • These aircraft were meant to replace the existing fleet of Avro VIP aircraft.
  • Communications Squadron had seven Avros, which were used for the visit of foreign delegations, Indian VIPs and other entitled persons (OEP).
  • The requirements of the three entitled personages — the president, the vice president and the prime minister were met by Boeing 737 aircraft.
  • Audit of the actual use of the Arvo fleet showed only about 4 per cent use by the entitled personages.
  • The use by OEPs was 37 per cent, the use for training assignments was 37 per cent and the balance was used for route transport role.

   

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