The Comptroller and Auditor General of India (CAG), in a report tabled in the Delhi Assembly on Friday, flagged serious irregularities in the Delhi government’s administration of electricity subsidies, GST compliance, e-procurement and departmental financial management, pointing to revenue implications and avoidable expenditure running into thousands of crores. The audit report flagged financial irregularities worth Rs 1,985.04 crore in the Revenue Sector alone, while observations relating to the Economic, Social and General Sectors involved another Rs 45.12 crore.
Electricity subsidy under scrutiny
The CAG raised questions over the design and implementation of Delhi’s electricity subsidy scheme, noting that subsidy expenditure increased from Rs 2,405.59 crore in 2019-20 to Rs 3,161 crore in 2022-23 — an increase of around 31 per cent in three years. The audit observed that the subsidy was extended to nearly the entire domestic consumer base without adequately factoring in the socio-economic status of beneficiaries. More than 30 lakh consumers using up to 200 units of electricity per month received an average subsidy of around Rs 6,000 per connection annually. In comparison, around 16.6 lakh consumers consuming more than 200 units received an average subsidy of over Rs 10,000 per connection — nearly 70 per cent higher. The CAG also detected instances where subsidies were released despite prolonged periods of zero electricity consumption. More than 50,000 consumers with no recorded consumption for over 12 months received subsidies amounting to Rs 17.81 crore. Similarly, over 90,000 consumers who recorded zero consumption for six to 11 months received Rs 11.88 crore, while more than 1.7 lakh consumers with no consumption for three to five months received Rs 12.57 crore. The audit said the payments pointed to weaknesses in the design and monitoring of the subsidy scheme and stressed the need for periodic analysis of consumption data to ensure that benefits are targeted more effectively.
GST compliance throws up major revenue risks
The CAG identified several instances of non-compliance in Delhi’s GST administration, particularly through analysis of the Goods and Services Tax E-Way Bill system. The audit found that five taxpayers generated 759 e-way bills involving outward supplies worth Rs 33.89 crore but reported nil liability in their GSTR-3B returns, resulting in non-payment of tax estimated at Rs 4.68 crore. In another set of cases, 15 taxpayers generated 580 e-way bills involving an assessable value of Rs 252.66 crore and tax liability of Rs 31.46 crore without filing their GSTR-3B returns. The audit also found that 28 taxpayers whose GST registrations had been cancelled generated 3,629 e-way bills involving goods valued at Rs 734.75 crore and tax implications of Rs 99.39 crore before cancellation. None of them filed the mandatory GSTR-10 final returns, while the department failed to initiate recovery proceedings for the pending tax liabilities. The report further detected 18 e-way bills worth Rs 4.72 crore generated using scrapped, stolen or otherwise suspicious vehicles. Three taxpayers were also found to have claimed excess Input Tax Credit (ITC) of Rs 9.70 crore over the amount available in GST records. A separate crossPAN analysis detected excess ITC claims of Rs 3.33 crore by three taxpayers. The CAG’s compliance audit covering 70 taxpayers detected 344 instances of non-compliance involving revenue implications of Rs 3,071.92 crore and turnover mismatches of Rs 3,710.17 crore. Of 487 high-value inconsistencies identified during the centralised audit, the department responded in only 127 cases. Remedial action was initiated in 91 cases, including 74 show-cause notices involving Rs 2,656.65 crore and 17 ASMT-10 notices involving Rs 273.87 crore.
E-procurement system raises collusion concerns
The audit also pointed to significant weaknesses in Delhi’s e-procurement system. As many as 1,185 tenders were floated manually despite the availability of an online procurement platform. Of the 50,903 registered bidders examined by the CAG, 66 were registered without mandatory PAN details. The audit further found that 45 tenders worth Rs 530.25 crore received bids from entities sharing the same PAN. Another analysis revealed that 12,283 bidders were registered using only 5,658 email IDs. Further, 14,527 bids relating to 7,181 tenders worth Rs 3,217.44 crore originated from common IP addresses. The CAG said these patterns raised concerns regarding the adequacy of system controls and the possibility of collusion among bidders.
Revenue receipts rise, but tax administration remains weak
According to the report, Delhi’s total revenue receipts increased from Rs 43,113 crore in 2018-19 to Rs 62,703 crore in 2022-23. During 2022-23, tax revenue accounted for Rs 47,363 crore, or 75.53 per cent of total revenue receipts. Nontax revenue stood at Rs 581 crore, or 0.93 per cent, while grants-in-aid from the Centre amounted to Rs 14,759 crore, accounting for 23.54 per cent. However, local audits of 22 units detected 145 cases involving non-levy or short levy of taxes and fees worth Rs 220.59 crore. The CAG noted that the departments concerned had not furnished replies to these audit observations.
Departments incur avoidable expenditure
The audit also highlighted several instances of unfruitful and avoidable expenditure across Delhi government departments and agencies. The Delhi State Industrial and Infrastructure Development Corporation (DSIIDC) incurred unfruitful expenditure of Rs 29.45 crore, while the Public Works Department made avoidable payments of Rs 5.63 crore. The CAG also flagged a potential interest loss of Rs 5.50 crore due to delayed investment of funds belonging to the DTC Employees’ Provident Fund Trust.
