The comptroller and auditor-general of India has recommended immediate review and closure of the transport subsidy scheme to the North-eastern states which have failed to clarify questionable payment of transport subsidy of Rs 177.68 crores even after eight years of submission of report to Parliament.
The CAG in its report has observed that monitoring and inspection of units and receipt of regular information regarding movement of finished goods and raw material were not effectively implemented which has significantly weaken the controls associated with the schemes and thereby increasing the risk of fictitious and ineligible claims.
The ministry of commerce and industry may claim to have flooded the North-eastern states with incentives but majority of such incentives are draining out to select group industrialists who are allowed to get away with majority of the transport subsidy incentives given to boost the industrialisation in the region.
In what was indicated by the CAG, there have also been reports of large scale misappropriation of transport subsidy by a group of industrialists in the Northeast.
According to records available with this newspaper, the ministry of commerce and industry has spent an amount of Rs 1,540 crores on transport subsidy so far, but the majority of it has gone to the sectors which have very little presence in the region.
The industrial units claiming the transport subsidy were asked to submit the progress report periodically to the DICs to prove their existence but not a single industrial units claiming transport subsidy have been able to submit the progress reports. This has resulted in major misappropriation of transport subsidy in the region.