Report of the

Comptroller and Auditor General of India

on
Social, Economic, Revenue and General Sectors
for the year ended March 2020

Government of Sikkim
Report No. 2 of 2022
 TABLE OF CONTENTS
Paragraph Particulars Page No.
Preface v
Overview vii
CHAPTER I: INTRODUCTION
1.1 About this Report 1
1.2 Historical Background and Authority for Audit 1
1.3 Planning and conduct of Audit 2
1.4 Significant Audit Observations 3
CHAPTER II: SOCIAL SECTOR
2.1 Introduction 5
2.2 Planning and conduct of audit 6
Education Department
2.3 Unfruitful expenditure due to non-utilisation of asset 7
CHAPTER III: ECONOMIC SECTOR
3.1 Introduction 11
3.2 Planning and conduct of audit 12
Department of Animal Husbandry and Veterinary Services
3.3 Doubtful procurement of piglets under piggery distribution 13
programme
Rural Development Department
3.4 Irregular allotment of works and undue benefit to 16
contractor
Rural Development Department and Land Revenue and Disaster Management
Department
3.5 Loss of revenue 18
Urban Development Department
3.6 Loss of revenue 20
CHAPTER IV: ECONOMIC SECTOR (Public Sector Undertakings)
4.1 Functioning of State Public Sector Undertakings 23
State Trading Corporation of Sikkim
4.2 Extension of undue benefit to supplier 37
CHAPTER V: REVENUE SECTOR
5.1 Trend of revenue receipts 41
5.2 Revenue and return filling trends 44
5.3 Analysis of arrears of revenue 46
5.4 Response of the departments/Government towards Audit 47

i
 5.5 Response of the departments to the draft audit paragraphs 48
5.6 Follow up on Audit Reports - summarised position 48
5.7 Analysis of the mechanism for dealing with issues raised 49
by Audit
5.8 Audit Planning 51
5.9 Results of audit 51
5.10 Coverage of this Report 51
Commercial Tax Division
5.11 Subject Specific Compliance Audit on processing of 52
refund claims under GST in Sikkim
Finance Department (Directorate of Sikkim State Lotteries)
5.12 Loss of Government revenue 59
5.13 Loss of revenue due to non-deduction of commission on 61
printing works of lotteries tickets
CHAPTER VI: GENERAL SECTOR
6.1 Introduction 65
6.2 Planning and conduct of audit 66
Directorate of Economics, Statistics, Monitoring & Evaluation, Rural
Development Department and Social Justice & Welfare Department
6.3 Direct Benefit Transfer (covering cash transfer only) 67
Finance Department
6.4 Loss of Government revenue 99
CHAPTER VII: FOLLOW UP OF AUDIT OBSERVATIONS
7.1 Follow up action on earlier Audit Reports 103
7.2 Response of the departments to the recommendations of 103
the Public Accounts Committee
7.3 Monitoring 104
7.4 Outstanding Inspection Reports 104
7.5 Departmental Audit Committee Meetings 105
APPENDICES
Appendix No. Particulars Page No.
2.1 Audit conducted during 2019-20 under Social Sector 107
3.1 Audit conducted during 2019-20 under Economic Sector 108
3.2 Details of standing properties and their monetary value 110
4.1 Summarised financial position and working results of 114
Government Companies and Statutory Corporations a per
their latest finalised accounts as on 30.03.2020

ii
 4.2 Statement showing Rate of Real Return on Government 119
Investment
4.3 Details of loss to State Exchequer 121
5.1 Delay in issue of acknowledgement 122
5.2 A Delay in refund & Interest due (19 Pre-Automation cases) 123
5.2 B Delay in refund & Interest due (9 Post-Automation cases) 124
5.3 Delay in sending copies of refund orders to the counterpart 125
tax authorities
5.4 Deviation in refund cases pertaining to inverted duty 127
structure
5.5 Refund (Post-Automation) sanctioned without filing of 128
GSTR 3B return
5.6 Non-submission of statement in case of refunds 129
(Pre-Automation) of excess payment of tax
5.7 Discrepancies in ARN Date and Application Date 130
5.8 Discrepancies in RFD05 Date (payment order date) issued 131
6.1 Audit conducted during 2019-20 under General Sector 132
6.2 Total number of Schemes implemented through DBT in 133
Sikkim
6.3 Sample Selection 136
6.4 Ineligible beneficiaries 137
6.5 Double pensions credited under IGNOAP 138
6.6 Double pensions credited under IGNWPS and UWPS 145
6.7 Delayed payment of pension through Axis Bank 146
6.8 Trail of disbursement of beneficiaries in respect of five 150
branches

iii
 PREFACE
This Report of the Comptroller and Auditor
General of India for the year ended
31 March 2020 has been prepared for
submission to the Governor of Sikkim under
Article 151 of the Constitution of India.

This Report contains significant results of

Performance Audit and Compliance Audit
(including Subject Specific Compliance
Audit) of the departments of the Government
of Sikkim under Social, Economic, Revenue
& General Sectors and Public Sector
Undertakings.

The cases mentioned in the Report are those

which came to notice in test audit during the
year 2019-20, as well as those which came
to notice in earlier years, but could not be
dealt with in the previous reports. Matters
relating to the period subsequent to 2019-20
have also been included appropriately in the
Report.

The audits have been conducted in

conformity with the Auditing Standards
issued by the Comptroller and Auditor
General of India.

v
OVERVIEW
 Overview

OVERVIEW
This Audit Report consists of seven chapters. Chapters II to VI deal with Social,
Economic (non-PSU), Economic (Public Sector Undertakings), Revenue and General
Sectors and Chapter I and Chapter VII deal with Introduction and Follow up of Audit
observations respectively.
This Report contains one Performance Audit, one Subject Specific Compliance Audit
on processing of refund claims under GST in Sikkim and nine Compliance Audit
Paragraphs besides the introductory chapters. The Reports of Performance Audit,
Subject Specific Compliance Audit and Compliance Audit Paragraphs were sent to
the Secretaries of the Departments concerned by the Principal Accountant General
(Audit) with request to furnish replies within six weeks. Replies received have been
suitably incorporated in the Report.
SOCIAL SECTOR
The Chapter on Social Sector consists of one Compliance Audit Paragraph.
COMPLIANCE AUDIT
Due to indifferent approach of Education Department for construction of
residential buildings and other facilities for Government College, the infrastructure
created at a cost of ₹ 4.05 crore remains un-utilised.
Recommendation: Department may fix the responsibility for non-utilisation of the
assets created and may take necessary action to utilise the same in a time bound
manner.
(Paragraph 2.3; Page 7)
ECONOMIC SECTOR
The Chapter on Economic Sector consists of four Compliance Audit Paragraphs.
COMPLIANCE AUDIT

Department of Animal Husbandry and Veterinary Services purchased piglets

costing ₹ 158.48 lakh without inviting tenders from three SHGs based outside
Sikkim. Two of these SHGs were not functioning and the purchase from the third
SHG was 10 times more than its available stock. The entire payments were made
in cash and ₹ 1.90 lakh paid for transportation of piglets was at uniform rate
irrespective of load and distance covered. No entry fee was collected for entry of
the piglets into Sikkim.
Recommendation: State Government should investigate the irregularities and
procurement process and fix responsibility of the erring officials within a specified
time frame.
(Paragraph 3.3; Page 13)

vii
Audit Report for the year ended 31 March 2020

Awarding CMRHM Phase-I project costing ₹ 379.20 crore to a contractor on

single tender that too with unreasonably high tender premium of 43.60 per cent
above the estimated cost and allotting CMRHM Phase-II project costing ₹ 443.49
crore to the same contractor without calling tenders in gross violation of financial
rules, led to undue benefit ₹ 63.31 crore to the contractor. In addition, excess
payment of ₹ 120.47 crore was also made to the contractor with 35 per cent of the
work of Phase-II still to be completed.
Recommendation: State Government may follow the prescribed procedure given
in Sikkim Public Works Manual while executing any scheme/works to ensure
transparency and financial propriety.
(Paragraph 3.4; Page 16)
Due to the lack of proper co-ordination among the departments concerned,
whereabouts of standing properties (Trees & bamboos) valuing ₹ 5.07 crore could
not be ascertained in Audit resulting in loss of government revenue to that extent.
Recommendation: The F&ED should be immediately informed for felling and
disposal of standing properties whenever land is acquired by Government
Departments, etc. for construction works.
(Paragraph 3.5; Page 18)
Urban Development Department failed to hand over of Restaurant and Public Plaza
to a firm to whom the allotment order to run these facilities on rent basis had been
duly issued, resulting in loss of government revenue amounting to ₹ 47.06 lakh..
Recommendation: The Department may fix responsibility of the authorities
concerned in a time bound manner for loss of revenue to the State Exchequer.
(Paragraph 3.6; Page 20)
ECONOMIC SECTOR (PUBLIC SECTOR UNDERTAKINGS)
As on 31 March 2020, the State of Sikkim had 16 working PSUs (12 working
Government Companies and four working Statutory Corporations) under the audit
purview of the Comptroller and Auditor General of India (CAG). During 2019-20, the
investment of the State Government (capital and long-term loans) in 16 PSUs
amounted to ₹ 49.93 crore consisting of 95.93 per cent (₹ 47.90 crore) towards capital
and 4.07 per cent (₹ 2.03 crore) towards long term loans.
(Paragraphs 4.1.1 and 4.1.2.1; Page 23)
The State’s budgetary support to PSUs decreased from ₹ 11.60 crore (2017-18) to
₹ 9.00 crore (2019-20) during the period from 2017-18 to 2019-20. As per the
information furnished by the PSUs, during 2019-20, the State Government infused
equity amounting to ₹ 2.50 crore in one PSUs namely Sikkim Power Development
Corporation Limited (SPDCL).
(Paragraph 4.1.4; Page 26)

viii
 Overview

As on 30 September 2020, 27 accounts of 14 PSUs had not been finalised.

(Paragraph 4.1.6; Page 28)
As per the latest finalised accounts of PSUs as on 30 September 2020, the aggregate
paid-up capital and accumulated losses of 16 working PSUs were ₹ 3,713.39 crore
and (-) ₹ 2,266.61 crore respectively, which included accumulated losses (₹ 3.23
crore) of four PSUs, which did not have capital.
(Paragraphs 4.1.8.1 and 4.1.8.2; Pages 30 and 31)
The Chapter on Economic Sector (Public Sector Undertakings) consists of one
Compliance Audit Paragraph.
COMPLIANCE AUDIT
State Trading Corporation of Sikkim (STCS) extended undue benefit to the tune of
₹ 2.09 crore to a supplier by accepting revision of prices after the scheduled date of
supply and granting ineligible advance
Recommendation: The State Government should initiate steps for time bound
manner for fixing of responsibility for extending of the undue favour to the
supplier and recover the amount from the supplier.
(Paragraph 4.2; Page 37)
REVENUE SECTOR
The Chapter on Revenue Sector contains one Subject Specific Compliance Audit
Paragraph and two Compliance Audit Paragraphs. This Chapter also gives an
overview of revenue receipts which shows during the year 2019-20, the revenue
raised by the State Government (₹ 1,663.81 crore) was 34 per cent of the total
revenue receipts. The balance 66 per cent of the receipts during 2019-20 was from
Government of India.
(Paragraph 5.1; Page 41)
In Sikkim, the actual revenue collected was more than the projected revenue, hence
compensation under GST Act was not payable to Sikkim during 2017-18 to
2019-20.
(Paragraph 5.2.1.2; Page 44)
The analysis of arrears of revenue as on 31 March 2020 showed that ₹ 376.33crore
was outstanding, of which, ₹ 107.33 crore was outstanding for more than five
years.
(Paragraph 5.3; Page 46)
SUBJECT SPECIFIC COMPLIANCE AUDIT
Subject Specific Compliance Audit on processing of refund claims under GST in
Sikkim was conducted to assess the adequacy of Act, Rules, notifications, circulars

ix
Audit Report for the year ended 31 March 2020

etc., its compliance and existence of effective internal control mechanism in disposing
the refund applications.
Audit observed that in 28 refund cases out of 43 cases, there was delay in
sanction of refunds ranging from 3 to 296 days.
(Paragraph 5.11.6; Page 54)
While verifying the records of transmission of refund sanction orders, it was
observed that 15 refund orders involving ₹ 0.59 crore were forwarded to the
Central tax authority with delays ranging from 10 to 16 days against the
stipulation of 7 working days.
(Paragraph 5.11.7; Page 55)
In 43 cases, examined none of the cases were sent for post audit of refund
claims.
(Paragraph 5.11.8; Page 55)
Out of 19 refund cases audited pertaining to Inverted duty structure, deviations
were found in two refund cases where the Division granted the refunds
although no such statements were furnished.
(Paragraph 5.11.9.1; Page 56)
Scrutiny of 11 selected cases and cross verification with GSTR 3B data
revealed that in 10 cases, refunds were sanctioned although the concerned
applicants had not furnished the GSTR 3B returns.
(Paragraph 5.11.9.2; Page 56)
While comparing the payment order in Form RFD 05 of the GSTN with that
of the State’s system’s data, Audit noticed that in 3 out of 11 cases, the date of
RFD 05 (as shown in GSTN) is different from the order date of RFD 05 (as
captured in the State System).
(Paragraph 5.11.10.2; Page 58)
Recommendations
In order to address the non-compliance to relevant provisions of the Acts and Rules
and to improve the effectiveness of the internal control system, the following
recommendations are made:
Compliance to relevant provisions of the Act and Rules should be monitored
and ensured by CTD, Sikkim at each stage of refund process right from issue
of acknowledgement up-to the credit of refund amount into the taxpayers
account within the prescribed time limit.
The CTD may address issues relating to auto calculation of interest in the
system in case of delay in sanction of refund.

x
 Overview

The CTD may consider put in place a system of post-audit of refund cases by
issuing detailed instructions/ guidelines.
The CTD should take necessary systemic steps to ensure that the data
captured by the state’s system is fully consistent with that in the common GST
portal.
COMPLIANCE AUDIT
The Directorate of Sikkim State Lotteries (DSSL) by violating the provisions of
agreement, allowed the Marketing Agent (MA) to continue the lottery draws even
though the MA had failed to deposit Minimum Assured Revenue and other dues.
This led to non-recovery of dues of ₹ 3.60 crore from the MA.
Recommendations: The Department may ensure adherence to the provisions of
agreements with marketing agents to prevent undue benefit to them and to avoid
loss to State Exchequer, and closely monitor the insolvency proceedings so as to
recover the dues to the extent possible.
(Paragraph 5.12; Page 59)
The DSSL failed to follow the prescribed instructions for printing works of
Government w.r.t. printing works of lotteries tickets and not deducted mandatory
three per cent commission from bills of the private printing presses, resulting in
loss of revenue of ₹ 5.09 crore.
Recommendation: The Department may fix responsibility for loss of revenue and
also initiate process for recovering the three per cent commission from the private
presses.
(Paragraph 5.13; Page 61)
GENERAL SECTOR
The Chapter on General Sector consists of one Performance Audit on ‘Direct Benefit
Transfer (covering cash transfer only)’ and one Compliance Audit Paragraph.
PERFORMANCE AUDIT
6.3 Performance Audit on “Direct Benefit Transfer”
Direct Benefit Transfer (DBT) is a major reform initiative of the Government of India
(GoI) to ensure better and timely delivery of benefits from the Governments to the
people. A Performance Audit on DBT w.r.t (i) Indira Gandhi National Old Age
Pension Scheme (IGNOAPS), (ii) Indira Gandhi National Widow Pension Scheme
(IGNWPS), (iii) Indira Gandhi National Disability Pension Scheme (IGNDPS),
Unmarried Women Pension Schemes (UWPS) and (v) Mahatma Gandhi National
Rural Employment Guarantee Scheme (MGNREGA), revealed the following
significant findings:

xi
Audit Report for the year ended 31 March 2020

Audit Observation
Porting of legacy data and digitization of database of beneficiaries was one of
the pre-requisites and condition of DBT to ensure direct processing and credit of
payments to the legitimate beneficiary in right account and in right time.
However, the SJWD neither utilized Central Ministry’s DBT Scheme
Management Software i.e. NSAP-PPS nor it developed its own Information and
Communication Technology for DBT. The database relating to payments to the
beneficiaries under these schemes were maintained in MS Excel and were
processed manually. Due to non-adoption of DBT Scheme Management Software
i.e. NSAP-PPS or non-development of its own IT Software for DBT by the
Department, the payment of pensions under these schemes suffered on account of
delays, non-payment of due benefits, giving rise to existence of intermediaries
like sponsoring banks that caused delays on one hand and on the other the SJWD
deprived itself of an effective Management Information System (MIS) to monitor
the actual payments to the beneficiaries.
(Paragraph 6.3.8.3(A)(i); Page 80)
Direct Benefit Transfer (DBT) enables the departments and institutions to deliver
cash benefits on-line directly to beneficiaries account in a timely and effective
manner by eliminating the intermediaries and obstacle layer. However due to
involvement of multiple intermediaries, the payments of pension took conservable
time in NSAP and SIS.
(Paragraph 6.3.8.3(A)(iii): Page 82)
As per DBT guideline issued by the GoI, the Department was required to collect
the Aadhaar details of beneficiaries and seed them in the beneficiary database,
the seeding of Aadhaar would enhance efficiency in the sanction, payment and
disbursement process. However, the Department has not seeded Aadhaar number
in entirety of total beneficiaries/workers both in NSAP, SIS and MGNREGA that
led to inclusion of ineligible beneficiaries, duplication of beneficiaries, etc. that
consequently resulted in irregular payments.
(Paragraph 6.3.8.3(A)(ii) & 6.3.8.3(B)(i); Pages 81 and 89)
NSAP targets the destitute with the objective of providing a basic level of
financial support. Analysis of beneficiaries’ data viz. name, account number and
drawal of IGNOAP with State Government Pension drawal data revealed that
there were ineligible beneficiaries who were drawing regular retired pension
from State Government as well as drawing the IGNOAP, besides there were
cases wherein more than one beneficiary of same household was drawing
pension under IGNOAPS, IGNWPS and UWPS.
(Paragraph 6.3.8.1(a) and (c); Pages 76 and 77)
The guidelines on NSAP stipulate that payment of pension be done on monthly
basis. However, it was noticed that pensions were disbursed on quarterly basis

xii
 Overview

upto March 2020, even the quarterly payments were delayed due to existence of
various intermediaries. The delay in crediting the pension to beneficiaries’
accounts ranged from two to 174 days. Similarly, as per MGNREGA guideline,
final FTO have to be uploaded within 15 days and thereafter two days provided
for payment of wages through Ne-FMS system. However, it was noticed that
against the total 11,31,905 transactions involving ₹ 236.12 crore made during
2017-18 to 2020-21, 1,86,280 transactions involving ₹ 37.35 crore were delayed
i.e. the payments were made after 15 days that constituted 16 per cent of total
transactions.
(Paragraph 6.3.8.3(A)(iv) & 6.3.8.3(B)(iii); Pages 83 and 91)
As per DBT guideline issued by the GoI, in case of failed transactions, the
Department after carrying out the required modification/rectification was
required to send the rectified files for payment again. However, an amount of
₹ 2.17 crore pertaining to the period 2017-18 to 2019-20did not reach 3,929
beneficiaries of these four selected schemes as the Department had failed to re
initiate these failed transactions. Further, SBS being sponsoring bank in 2020-21,
there was failed transaction of 752 transactions involving ₹ 19.90 lakh. Similarly
in MGNREGA, it was noticed that out of total 15,364 failed transactions
involving ₹ 3.10 crore, 14,237 transactions amounting to ₹ 2.86 crore were
re-initiated successfully, leaving a balance of 1,127 transactions amounting to
₹ 24.29 lakh which were yet to be rectified and remained pending payment as of
February 2021.
(Paragraph 6.3.8.3(A)(v) and 6.3.8.3(B)(iv); Pages 86 and 92)
As per DBT guideline, each State should have a State DBT (SDBT) Cell to
identify DBT schemes or DBT components of schemes and classify them in i)
Cash Transfer ii) Transfer In-kind iii) Other Transfers/Processes. The SDBT Cell
was required to study the existing process flow and fund flow under each scheme
and reengineer the same wherever necessary. The SDBT cell would develop an IT
based System Utility/MIS for its schemes that would provide a coherent
centralised workflow engine for field functionaries, officials and beneficiaries
and enable report generation, dynamic update of data and daily tracking of
progress. The SDBT Cell was also required to constitute a dedicated body to deal
with complaints and grievances of beneficiaries in a fair and timely manner.
However, it was noticed that State DBT Cell, State Advisory Board and DBT
Committee were not constituted and also no dedicated body to deal with
complaints and grievances of beneficiaries/workers formed. This led to delays in
payment/ non-payment of wages/ benefits to the workers/ beneficiaries in respect
of MGNREGA and NSAP.
(Paragraph 6.3.8.4(A), 6.3.8.4(B) and 6.3.8.4(C); Pages 95, 96 and 97)

xiii
Audit Report for the year ended 31 March 2020

Recommendations
The Department may create a proper database of the eligible beneficiaries
and the information furnished by the beneficiaries may be verified by the
verification team periodically with special emphasis cases related to old age
pension.
A system of obtaining NOC from the Pension, Group Insurance and Provident
Fund (PGIPF) Division of Finance Department GoS should be made
mandatory for availing benefit under NSAP.
The Department may fix responsibility of the authorities concerned in a time
bound manner and should stop such payments of pension to ineligible
beneficiaries.
The Department should take necessary action to recover the payments made to
the ineligible beneficiaries as per the terms of ‘undertaking’ included in
application form submitted by the beneficiaries.
The SJWD should ensure its application software is compatible/in sync with
porting of information / data onto NSAP-PPS through a bridge-software so
that benefits of the schemes are delivered to the beneficiaries on time.
The Government/ Department may take necessary steps so as to Aadhaar
seeding of beneficiaries may be completed without any further delay.
Aadhaar seeding of beneficiaries above the age of 80 years, disabled
beneficiaries, sick beneficiaries may be conducted at their doorstep.
The SJWD should set up system to obtain the data/ information of failed
transactions from the respective agencies at predetermined intervals and take
immediate steps to re-initiate the payments so that the beneficiaries are not
deprived of their legitimate dues.
The Government may specify time frame for rectification/ ratification for the
cases relates to failed transactions.
The RDD should re-initiate all pending transactions on urgent basis so that
the pending wages are paid to the concerned workers without further delay.
Secondly, the RDD should review the pending wages periodically and
disbursement made within prescribed timeframe.
Accounts of all the workers under MGNREGA may be seeded with Aadhaar on
priority and accounts may also be validated before initiation of transaction.

DESME being declared as State DBT Cell may perform all function of SDBT
as laid down in GoI DBT guidelines, so that the benefits of the schemes
concerned are ensured as per guidelines of DBT. DESME should also ensure
that the DBT framework is adopted by all the implementing Department.

xiv
 Overview

State DBT Cell (DESME) should be strengthened with required manpower to

operationalise its organisational structure with the assigned responsibilities to
enable the DBT Cell to act as one-stop point or nodal point for smooth
on-boarding of schemes on to DBT platform and to effectively monitor the
progress made by each Implementing Department by setting targets and
milestones for implementation of DBT in a time bound manner.
COMPLIANCE AUDIT
Finance Department invested Guarantee Redemption Fund at lower rate of interest
which led to loss of Government revenue of ₹ 31.50 lakh on account of interest.
(Paragraph 6.4; Page 99)
FOLLOW UP OF AUDIT OBSERVATIONS
Public Accounts Committee had discussed Audit Reports for the year up to
2013-14 and given recommendations on the Audit Reports for the year up to
2012-13.
(Paragraph 7.2; Page 103)
As of March 2020, 1,318 Inspection Reports (IRs) (4,091 paragraphs) issued from
1990-91 onwards were pending for settlement. The large pendency of IRs
indicates absence of adequate action to rectify defects, omission and irregularities
by the Heads of Offices and Heads of Departments as pointed out by audit
through IRs.
(Paragraph 7.4; Page 104)
During 2019-20, we conducted three Audit Committee Meetings with Urban
Development Department, Agriculture Department and Excise Department where
36 IRs and 134 paragraphs were discussed, out of which 12 IRs and 61 paragraphs
were settled.
(Paragraph 7.5; Page 105)

xv
 CHAPTER I
INTRODUCTION
 Chapter I: Introduction

CHAPTER I
INTRODUCTION

1.1 About this Report

This Report of the Comptroller and Auditor General of India (C&AG) relates to
matters arising from the performance audits and test audit of transactions of various
departments of the Government of Sikkim pertaining to Social, Economic (non-PSU),
Economic (PSU), Revenue and General Sectors.
The primary purpose of this Report is to bring to the notice of the State Legislature,
significant results of audit. Auditing standards require that the materiality level for
reporting should be commensurate with the nature, volume and magnitude of
transactions. The findings of audit are expected to enable the Executive to take
corrective action, to frame appropriate policies as well as to issue directives that will
lead to improved financial management and contribute to better governance.
This Chapter in addition to explaining the planning and coverage of audit, provides a
synopsis of significant instances of non-compliance with applicable laws, rules,
regulations, various orders and instructions issued by competent authorities.
1.2 Historical Background and Authority for Audit
Sikkim is the 22nd State of the Indian Union, having merged with the Indian Union
on 26 April 1975. Initially Sikkim Cell was created under the charge of Joint
Director, in the Office of the Director of Audit, Central, Kolkata, to discharge the
accounting and auditing functions for the State of Sikkim. A full-fledged office as an
independent unit started functioning in Gangtok w.e.f 10 December 1981. Consequent
to restructuring of cadres in the Indian Audit and Accounts Department on 01 March
1984, this Office was bifurcated into two offices, viz. Accounts & Entitlement Office
(A&E) and Audit Office. The office is headed by Principal Accountant General.
Under the directions of C&AG, the Office of the Principal Accountant General
(Audit), Sikkim conducts audit of Government departments, Public Sector
Undertakings, Autonomous Bodies and other Institutions1 under Social, Economic,
Revenue and General Sectors, which are spread all over the State. The Principal
Accountant General (Audit) is assisted by a Deputy Accountant General.
The authority of audit is derived from Article 149 and 151 of the Constitution of India
and the Comptroller and Auditor General’s (Duties, Powers and Conditions of
Service) Act, 1971 (C & AG’s (DPC) Act). Under Section 13 of the C & AG’s
(DPC) Act the Office of the Principal Accountant General (Audit) has been entrusted
with the audit of all expenditure incurred from the Consolidated Fund of Government
of Sikkim. This office conducts audit of revenue receipts of Government of Sikkim
under Section 16 of the C & AG’s (DPC) Act. The office of Principal Accountant

1
Audit of World Bank assisted projects, Asian Development Bank assisted projects etc.

1
Audit Report for the year ended 31 March 2020

General (Audit) conducts supplementary audit of the accounts of four State

Government companies under Section 143 (6) (a) of the Companies Act, 2013, as
these companies are registered under the Companies Act, 2013. The Companies Act
1956 as well as Companies Act 2013 have not been extended to the State of Sikkim.
Therefore, other companies of the State Government, (expect the four companies) are
registered under State’s own “Registration of Companies Act Sikkim 1961”. Audits
of these companies are entrusted to CAG of India by the State Government from time
to time.
This office is responsible for audit of accounts of autonomous bodies and authorities
falling under Section 14, 15, 19 (2), 19 (3) and 20 (1) of C & AG’s (DPC) Act. The
C&AG prescribes the principles and methodologies for various audits in the Auditing
Standards and the Regulations on Audit and Accounts, 2007.
1.3 Planning and conduct of Audit
Audit process commences with the assessment of risk of the departments based on the
expenditure incurred, criticality/complexity of activities, priority accorded for the
activity by the Government, level of delegated financial powers, assessment of
internal controls, concerns of stakeholders, previous audit findings, etc. Based on this
risk assessment, frequency and extent of audit are decided and an annual audit plan is
formulated to conduct audit.
After completion of each audit, Inspection Report (IR) containing audit findings is
issued to the Head of the unit with a request to furnish replies within one month of
receipt of the IR. Wherever replies are received, audit findings are either settled or
further action for compliance is advised. Significant audit observations pointed out in
these IRs, which require attention at the highest level in the Government, are
processed for inclusion in the Audit Reports which are submitted to the Governor of
Sikkim under Article 151 of the Constitution of India for causing them to be laid on
the Table of the State Legislature.
Audit Plan is prepared in such a way that it fits into the long term and short-term
goals of audit in consonance with the overall “Vision and Mission” of the Indian
Audit & Accounts Department. It is prepared after carrying out risk assessment and
keeping in view the available manpower. Elements of the Audit Quality Management
Framework (AQMF) viz. materiality, inputs from Voucher Level Computerisation
(VLC), financial size of the units, data from various e-governance initiatives taken by
government, flagship programme undertaken by auditees, press criticism/ electronic
media coverage, expected audit impact and continuous improvement based on past
experience, etc. are taken into account to the extent possible while framing out the
plan. A sector wise analysis of government spending, investment policy of the
government in infrastructure development, industrialisation and socio-economic
activities along with due consideration of possible audit impact is taken into account
in prioritising auditee units for preparing the audit plan.

2
 Chapter I: Introduction

Considering the availability of resources, focus has been given in areas of high
financial risk than to thinly spreading out the resources throughout the Government
activities. This would have better socio-economic impact and add value to
governance.
Out of 661 auditee units2, we planned 247 units3 for audit during 2019-20 after
carrying out risk assessment and keeping in view the available manpower, of which
1784 units were actually audited during 2019-20.
1.4 Significant Audit Observations
During the year 2019-20, the State Government had incurred an expenditure of
₹ 7,072.33 crore against the budget provision of ₹ 9,219.15 crore under Social,
Economic and General Sectors. Sector wise budget estimates and expenditure during
year 2019-20 is depicted in the Chart Nos. 1.1 and 1.2 respectively.

Chart 1.1: Sector-wise Budget Chart 1.2: Sector-wise

Estimates (₹ in crore) expenditure (₹ in crore)

3507.57 2128.96 1357.78

2994.08

3582.62 2168.2

Social Sector Economic Sector Social Sector Economic Sector

General Sector General Sector

Source: Appropriation Accounts 2019-20

This Report inter alia contains one Performance Audit titled “Direct Benefit
Transfer” alongwith one Subject Specific Compliance Audit paragraph on
processing of refund under GST in Sikkim and nine Audit paragraphs. These are
discussed in the respective succeeding chapters.

2
Including 55 Commercial Units
3
Including 18 Commercial Units
4
Including 8 Commercial Units

3
 CHAPTER II
SOCIAL SECTOR
 Chapter II: Social Sector

CHAPTER II
SOCIAL SECTOR

2.1 Introduction
This Chapter of the Audit Report deals with audit findings on functioning of the
Government departments falling under Social Sector.
The names of the Government departments, total budget allocation and expenditure of
the Government under Social Sector during the year 2019-20 are given in the table
below:
Table 2.1: Departments, budget allocation and expenditure under Social Sector during 2019-20
(₹ in crore)
Sl. Name of the Department Total Budget Expenditure
No. Allocation
1 Culture Department 25.55 24.46
2 Ecclesiastical Affairs 24.10 23.56
3 Food, Civil Supplies and Consumer Affairs 40.03 22.69
4 Health Department 479.95 432.60
5 Education Department 1,277.03 1,198.54
6 Labour Department 5.63 5.82
7 Social Justice, Empowerment and Welfare 276.67 202.38
TOTAL 2,128.96 1,910.05

Besides the above, the Central Government had been transferring funds directly to the
implementing agencies under the Social Sector. The major transfers for implementation
of flagship programmes of the Central Government are detailed below:
Table 2.2: Major transfers for implementation of flagship programmes of the Central
Government
(₹ in lakh)
Sl. Name of the Name of the Implementing Agency Funds transferred
No. Department Scheme/Programme during the year
1 Social Justice, Grants-in-aid to Muyal Liang Trust (MLT) 21.79
2 Empowerment Voluntary Organisations Human Development 8.68
and Welfare working for the Welfare Foundation of Sikkim, GRBA
of Scheduled Tribes. Road Chongey Tar, Gangtok,
East Sikkim
3 Cultural Kala Sanskriti Vikas Khachoed Pema Woeling 5.26
Department Yojana Trust
4 Himalayan Heritage Research 3.38
and Development Society
5 Health Care, Scheme for Prevention of Association for Social Health 18.55
Human Services Alcoholism and in India
and Family Substance (Drugs) Abuse
Welfare Establishment SMPB Sikkim 281.89
Expenditure – AYUSH
National AIDS and STD Sikkim State AIDS Control 554.19
Control Programme Society
6 Education Atal Innovation Mission Greendale Senior Secondary 12.00
Department School
Sadam Senior Secondary 12.00
School
Beti Bachao Beti Padhao District Collector, BBBP, 47.50
North Sikkim

5
Audit Report for the year ended 31 March 2020

Sl. Name of the Name of the Implementing Agency Funds transferred

No. Department Scheme/Programme during the year
Establishment Ash Bahadur Subba 0.19
Expenditure Higher Mrs. Jyotshna Mayee Patra 0.40
Education
National Service Scheme Sikkim State NSS Cell 166.35
TOTAL 1,132.18
Source: Finance Accounts

2.2 Planning and conduct of audit

Audit process starts with the assessment of risks faced by various departments of
Government. The assessment is based on expenditure incurred, criticality/complexity
of activities, level of delegated financial powers, assessment of overall internal
controls, etc.
After completion of audit of each unit on a test check basis, Inspection Reports (IRs)
containing audit findings are issued to the heads of the departments. The departments
are to furnish replies to the audit findings within one month of receipt of the IRs.
Whenever replies are received, audit findings are either settled based on reply/action
taken or further action is required by the audited entities for compliance. Some of the
important audit observations arising out of the IRs are processed for inclusion in the
Audit Reports. The Audit Reports are submitted to the Governor of the State under
Article 151 of the Constitution of India for laying on the table of the Legislature.
Test audits were conducted involving expenditure of ₹ 485.99 crore (including
expenditure of ₹ 13.63 crore of previous years) of the State Government under Social
Sector. The details of year-wise break-up is given in Appendix 2.1.
This Chapter contains one Compliance Audit Paragraph.

6
 Chapter II: Social Sector

COMPLIANCE AUDIT PARAGRAPH

EDUCATION DEPARTMENT

2.3 Unfruitful expenditure due to non-utilisation of asset

Due to indifferent approach of the Department for construction of residential

buildings and other facilities for Government College, the infrastructure created
at a cost of ₹ 4.05 crore remains un-utilised.
To mitigate the problem of residential accommodation faced by the Principal, other
faculty members, staff and students of the Government Degree College, Kamrang,
South Sikkim, and provide other infrastructure, the Education Department
(Department) submitted (May 2006) to the Government a proposal for “ Construction
of Residential Buildings, Hostels and Approach Roads and Compound Fencing for the
College5”. The proposal was approved (June 2006) by the Cabinet for ₹ 485.62 lakh
which was later revised to ₹ 504.45 lakh in March 2007. The work was sanctioned
under Accelerated Development of Less Developed Areas (Plan) under Rashtriya Sam
Vikas Yojna (RSVY).
The Civil Work was awarded (June 2006) to the lowest bidder at a cost of ₹ 392.33
lakh (30 per cent above estimated value) with stipulated completion period of
eighteen months i.e. by January 2008. The work was revised (March 2007) to
₹ 504.45 lakh.
Scrutiny of records (February 2021) revealed the following observations in audit.
The work was completed in August 2013 at a cost of ₹ 404.84 lakh with a delay
of more than four years and the completed buildings were handed over to the
College authority on October 2013 after full inventory check as per approved
plans and specifications.
Despite completion of the work on August 2013 and its satisfactory hand over to
the College authorities in October 2013, the financial closure of the work was not
done due to fund constraint. Further, due to absence of copy of revised work
order, record of the issuance of the same in the file, the revised work order was
approved/ issued (January 2018) ex-post facto with total work value of ₹ 406.08
lakh after a delay of more than four years of completion.
The College authority, however, have not yet utilised the assets despite lapse of
more than eight years. This was despite the fact that the handing/taking over note
had clearly mentioned that works were completed as per the approved plan and
specification and that inventory and sanitary items were thoroughly examined.
The buildings were in dilapidated condition and were unfit for occupation as seen
in the following photographs:

5
One Unit Principal’s quarter, 12 Units Lecturers’ quarter and 12 Units Class III & IV quarters.

7
Audit Report for the year ended 31 March 2020

The reasons attributed by the College Authorities for non-occupation of these

residential buildings over the period were:
• Water connection was not proper, rust had developed in GI pipes, there was
no connection of waste pipe for wash basin and Sintex tanks required
replacement.
• Electrical wiring was done in haphazard manner, most of the switches were
non-functional, there were breakage of electrical wire.
• Civil works were of sub-standard quality and within very short span of
constructions; the cracks had appeared in the building as can be seen from
photograph above.
• Due to leakages during the monsoon and dampness, the paints had withered
out.

8
 Chapter II: Social Sector

The reasons put forward by the College authorities do not seem logical as the
buildings were taken over after full inventory check and the certification that the
construction was as per approved plan and specification. In view of the above, these
points of defect appear to be an afterthought.
The authorities have carried out (September 2016) repair and renovation of Girls and
Boys Hostel by incurring an expenditure of ₹ 11.99 lakh. Now, the College
Authorities (April 2022) requested the Department for further repair and renovation
works at an estimated cost of ₹ 20 lakh, to make the facility habitable.
Thus, the overall expenditure of ₹ 4.17 crore incurred for construction and repairs of
these facilities was rendered wasteful as the students were deprived of hostel facilities
and the faculties and staff of the college were denied government residential facilities.
Simultaneously, the Government has been paying substantial amount as House Rent
Allowances since the last eight years despite availability of Government
accommodation.
The matter was reported to Department; their replies is awaited (April 2022).

Recommendation: Department may fix the responsibility for non-utilisation of the

assets created and may take necessary action to utilise the same in a time bound
manner.

9
 CHAPTER III
ECONOMIC SECTOR
 Chapter III: Economic Sector

CHAPTER III
ECONOMIC SECTOR
3.1 Introduction

This chapter of the Audit Report deals with audit observations on the functioning of
the Government departments under Economic Sector.
The names of the departments and the total budget allocation and expenditure of the
Government under Economic Sector during the year 2019-20 are given in the table
below:
Table 3.1: Details of budget allocation and expenditure
(₹ in crore)
Sl. Name of the Department Total Budget Expenditure
No. Allocation
1 Animal Husbandry & Veterinary Services Department 85.61 74.23
2 Buildings and Housing Department 85.77 76.46
3 Commerce and Industries Department 62.55 61.97
4 Co-operation Department 17.88 16.98
5 Power Department 328.63 306.29
6 Agriculture Department 225.11 139.72
7 Forest & Environment Department 271.03 156.19
8 Horticulture Department 171.11 86.46
9 Water Resources Department 54.11 41.76
10 Mines & Geology Department 7.04 6.52
11 Roads and Bridges 601.98 380.64
12 Rural Development Department 861.05 351.32
13 Tourism and Civil Aviation 74.49 61.99
14 Transport Department 89.79 79.14
15 Urban Development Department 409.70 203.84
16 Public Health Engineering Department 196.74 102.00
17 Food & Civil Supplies Department 40.03 22.69
TOTAL 3,582.62 2,168.20
Source: Appropriation Accounts 2019-20.

Besides, the Government of India had been transferring funds directly to the
implementing agencies under the Economic Sector. The major transfers for
implementation of flagship programmes of the Central Government are detailed
below:
Table 3.2: Details of funds directly transferred to the implementing agencies
(₹ in lakh)
Sl. Name of the Name of the Implementing Agency Funds transferred
No. Department Scheme/Programme during the year
1 Tourism and Domestic Promotion and Sikkim Tourism 50.00
Civil Aviation Publicity including Market Development
Development Assistance Corporation Ltd.
2 Forest and Environmental Education, State Environment 71.19
Environment Awareness and Training Agency
Environmental Information -do- 70.54
Systems
Pollution Abatement State Pollution Control 7.00
Board Sikkim

11
Audit Report for the year ended 31 March 2020

Sl. Name of the Name of the Implementing Agency Funds transferred

No. Department Scheme/Programme during the year
3 Tourism and Integrated Development of Sikkim Tourism 302.93
Civil Aviation Tourist Circuits around specific Development
themes (Swadesh Darshan) Corporation Ltd.
4 Animal Rastriya Gokul Mission Sikkim Livestock 677.98
Husbandry & Development Board
Veterinary
Services
5 Power Small Hydro Power – Grid Sikkim Power 5.00
Department Interactive Development
Corporation Ltd.
6 Transport/ Transport Planning and Sikkim Urban 46.44
Urban Capacity Building in Urban Development Agency
Development Transport
7 Commerce and Ambedkar Kasthshilp Vikas Sikkim Handloom & 9.80
Industries Human Resource Development Handicrafts Dev. 32.28
Department - Handicrafts Corporation Ltd.
Marketing Support Services (SHHDC) 6.81
National Handloom 26.16
Development Programme
NER Textiles Promotion 20.90
Scheme
Promotional Services Sikkim Industrial 2.45
Institution and Programmes1 Development and
Investment
Corporation Ltd.
(SIDICO)
Total 1329.48
Source: Finance Accounts 2019-20

3.2 Planning and conduct of audit

Audit process starts with the assessment of risks faced by various departments based
on expenditure incurred, criticality/complexity of activities, level of delegated
financial powers, assessment of overall internal controls, etc.
After completion of audit of each unit on a test check basis, Inspection Reports (IRs)
containing audit findings are issued to the heads of the departments. The departments
are required to furnish replies to the audit findings within one month of receipt of the
IRs. Whenever replies are received, audit findings are either settled based on
reply/action taken or further action is required by the audited entities for compliance.
Some of the important audit observations arising out of these IRs are processed for
inclusion in the Audit Reports. The Audit Reports are submitted to the Governor of
the State under Article 151 of the Constitution of India for laying on the table of the
Legislature for taking further appropriate action.
Test audits were conducted involving expenditure of ₹ 1294.26 crore (including
expenditure of ₹ 202.50 crore of previous years) of the State Government under
Economic Sector. The details of year-wise break-up are given in Appendix 3.1.
This Chapter contains four Compliance Audit Paragraphs.

12
 Chapter III: Economic Sector

COMPLIANCE AUDIT PARAGRAPHS

DEPARTMENT OF ANIMAL HUSBANDRY AND VETERINARY SERVICES

3.3 Doubtful procurement of piglets under Piggery Distribution Programme

Department of Animal Husbandry and Veterinary Services purchased piglets

costing ₹ 158.48 lakh without inviting tenders from three SHGs based outside
Sikkim. Two of these SHGs were not functioning and the purchase from the third
SHG was10 times more than its available stock. The entire payments were made
in cash and ₹ 1.90 lakh paid for transportation of piglets was at uniform rate per
irrespective of load and distance covered. No entry fee was collected for entry of
the piglets into Sikkim.
The State Government implemented Piggery Distribution Programme during 2018-19
with the objectives: (i) to support the weaker section of rural farmers with an effort to
uplift their per–capita income; (ii) to inculcate entrepreneurship among the rural based
farmers to bring upto professional level and sustainable livelihood; (iii) sourcing
piglets and pork to meet the increasing demand; and (iv) to step up to fulfil the
National Mission of doubling the rural economy by 2022-23.
The Department of Animal Husbandry and Veterinary Services, Government of
Sikkim sought approval of the State Cabinet on three occasions (in August and
November 2018 and January 2019) to procure 4022 piglets for distribution to the
beneficiaries in the State under Piggery Distribution Programme during 2018-19. In
the proposals submitted to the Cabinet, the Department proposed for procurement of
piglets aged two months and above. In the Cabinet Memorandum dated 1 August
2018, it was stated that the piglets would be sourced from hill tracts of West Bengal,
Assam Border, Border areas of Nepal and purchase of piglets by the Department itself
was to be done to ensure the quality of piglets; whereas as per remaining two
memoranda the piglets were to be sourced from Sikkim and West Bengal.
The proposal-wise details of piglets to be procured, breed and sex of piglets, ratio of
distribution and beneficiaries is give as under:
Table 3.3: Details of proposal submitted to the Cabinet
Date of Breed of Sex ratio of piglets Total Total piglets to be procured Total cost
Cabinet piglets to be distributed to number of (₹ in lakh)
approval each beneficiary beneficiaries Male Female Total
and their rate

1 Aug. 2018 Hampshire, Ratio-One male: one 580 580 580 1180 47.20
Saddleback, female
Yorkshire, Rate-Male @ ₹ 4500,
Largeback (plus 20 for
Female @ ₹ 3500
mortality)
28 Nov. 2018 -do- Ratio-One male: two 150 150 300 460 18.40
females
Rate-@ ₹ 4000 (plus 10 for
(Rates not mentioned mortality)
separately)

13
Audit Report for the year ended 31 March 2020

Date of Breed of Sex ratio of piglets Total Total piglets to be procured Total cost
Cabinet piglets to be distributed to number of (₹ in lakh)
approval each beneficiary beneficiaries Male Female Total
and their rate
30 Jan. 2019 -do- Ratio-One male: one 1176 1176 1176 2382 95.28
female (One
Rate: @ ₹ 4000 extra not
(Rates not mentioned (plus 29 for explaine
separately) mortality) d)

Total 1906 4022 160.88

Accordingly, the Department withdrew an amount of ₹ 145.50 lakh through three

Abstract Contingent Bills.
Audit observed serious irregularities in procurement and transportation of these
piglets as mentioned in following paragraphs:
a. Scrutiny of records (January 2020) revealed that the Department had
purchased 3962 piglets from three Self Help Groups (SHGs) based in Darjeeling
District of West Bengal without inviting tenders. This was gross violation of Rule 127
of Sikkim Finance Rule (SFR) 1979 which states that the purchase costing more than
₹ 10 lakh, should be made after inviting open tenders by giving wide publicity.
b. The Department had not issued any Supply Orders for procurement of piglets
and made the payments based on six bills submitted by the suppliers as shown in table
below. It was seen that none of the bills, against which 3962 piglets were shown
procured, specified the breed and age of piglets, and four bills, against which 2,782
piglets were shown procured, did not mention sex of piglets. The 2,782 piglets, whose
sex was not mentioned, were purchased at uniform rate of ₹ 4,000 per piglet. The
following table shows the details of suppliers, number of piglets and rates as given in
the bills.
Table 3.4: Details of pigs procured
Sl. Name SHG Date of Bill Details of piglets Total
No. Male Rate Female Rate Sex not Rate amount
mentioned (₹ in lakh)
1. Janakalyan SHG, Pul 29 Sep. 2018 300 4500 300 3500 Nil -- 24.00
Bazar, Darjeeling
2 Janakalyan SFG, Pul 9 Feb 2019 -- -- -- -- 672 4000 26.88
Bazar, Darjeeling
3 Janjagaran, SHG, Pul 20 Sep 2018 290 4500 290 3500 Nil -- 23.20
Bazar, Darjeeling
4 Janjagaran, SHG, Pul 23 Feb 2019 -- -- -- -- 870 4000 34.80
Bazar, Darjeeling
5 Shree Junga SHG, Pul 25 Feb. 2019 -- -- -- -- 400 4000 16.00
Bazar, Darjeeling
6 Shree Juga SHG, Pul 31 Feb 2019 -- -- -- -- 840 4000 33.60
Bazar, Darjeeling
Total 590 590 2782 158.48

c. As per cross verification by Audit, two SHGs viz. Janakalyan SGH and
Janjagran SHG from whom 1,272 piglets and 1,450 piglets respectively were
purchased by the Department in September 2018 and February 2019, were not
functioning during 2018-19. Meanwhile, the total availability of piglets with the third

14
 Chapter III: Economic Sector

SHG viz. Shree Junga SHG,from whom 1,240 piglets were purchased, was only 20
piglets during 2018-19.
d. The Department had paid the amounts as shown in Table 3.4 in cash to the
respective SHGs which was a gross violation of financial rules.
e. It was seen that trip-wise delivery challans for transporting the piglets were
not available in the records, and the Department had paid transportation charges on
the basis of hand receipts. Though the piglets were to be distributed all over the State,
yet transportation charges were paid at uniform rate of ₹ 5000 per trip irrespective of
the distance. The details of vehicles/ number trips and payment made is shown
below:
Table 3.5: Details of vehicles hired for transporting piglets
Date of Registration Registering authority Make and No. of trips Total
hand No. of Vehicle model of (number of amount
receipt vehicle piglets) paid
(Information extracted from VAHAN) (in ₹)
25 Feb WB 73E6 867 Siliguri ARTO West Bolero Pickup 4(460) 20,000
2019 Bengal
SK 04 D 1075 Jorthang Sikkim Bolero Pickup
23 Feb WB 73 D 0732 Siliguri ARTO West Mahindra 23(2382) 115,000
2019 Bengal Pickup
WB 73 E 0002 Siliguri ARTO West Mahindra
Bengal Pickup
Not WB 73 E 0661 Siliguri ARTO West Mahindra 11(not 55,000
mentioned Bengal Pickup mentioned)
Total 1,90,000
f. As per the Notification No.103/AH&VS (Adm) dated 19 June 2018, entry fee
of ₹ 25 per piglet was fixed by the State Government. The Check Points of the
Department at Rangpo and Melli allow entry of livestock into the State only after
realising of entry fee. There was no evidence in records of the Department to show the
payment of entry fee (₹ 0.99 lakh) for these piglets.
Thus, the Department incurred a total expenditure of ₹ 166.83 lakh towards purchase
of piglets (₹ 158.48 lakh), transportation (₹ 1.90 lakh), cash incentives (₹ 6.00 lakh)
and pig fodder (₹ 0.45lakh) for the above three programmes. Thus, irregularities,
inconsistencies, discrepancies as pointed out in the preceding paragraphs raise serious
doubts about the genuineness of purchase of the piglets and expenditure on the other
components thereof.
Matter was brought to the notice of Department (February 2020), to which the
Department replied (March 2021) that it implemented that programme successfully
and also provided the details of vehicles, monitoring and evaluation reports, and
photographs.
Cross verification from the Police and Transport Departments (April 2021) by Audit
showed that none of the vehicles had entered the State with livestock, hence raising
the doubt on transportation of piglets from West Bengal.

15
Audit Report for the year ended 31 March 2020

Recommendation: State Government should investigate the irregularities and

procurement process and fix responsibility of the erring officials within a specified
time frame.

RURAL DEVELOPMENT DEPARTMENT

3.4 Irregular allotment of works and undue benefit to contractor

Awarding CMRHM Phase-I project costing ₹ 379.20 crore to a contractor on

single tender that too with unreasonably high tender premium of 43.60 per cent
above the estimated cost and allotting CMRHM Phase-II project costing ₹ 443.49
crore to the same contractor without calling tenders in gross violation of financial
rules, led to undue benefit ₹ 63.31 crore to the contractor. In addition, excess
payment of ₹ 120.47 crore was also made to the contractor with 35 per cent of the
work of Phase-II still to be completed.
Section 9.6 (vi) of The Sikkim Public Works (SPW) Manual 2009 stipulates
participation of at least three tenders to make the tender process more competitive and
for proper evaluation of the rates offered by the contractors. Tenders received in less
than three valid tenders shall be summarily rejected and fresh tender shall be invited.
Further Section 9.6 (i) of SPW Manual states that all works proposed for execution by
contract will be notified in a form of invitation to tender.
Scrutiny of records (June 2021) of Rural Development Department (RMD) revealed
that the Cabinet had approved and sanctioned (May 2016) construction of 3000 RCC
houses under ‘Chief Minister’s Rural Housing Mission Phase-I’ at an estimated cost
of ₹ 264.00 crore, with the objective of converting the Sikkim “Kutcha House free
State” by 2018-19.
Accordingly, the RMD invited Expression of Interest (EoI) from reputed
entrepreneurs by publishing in leading local and national newspapers6 during 12 June
2016 to 17 June 2016. In response, three firms7 submitted EoIs and the Department
evaluated all three firms pre-qualified for participation in tender comprising of both
technical and financial bids. The RDD published Notice Inviting Tender (NIT) in
December 2016 from these three pre-qualified firms, however, only one firm
participated in the bidding process. The rate quoted by the firm was ₹ 395.39 crore
i.e., 49.75 per cent above the estimated cost (₹ 264.00 crore).
The Department instead of rejecting the same and inviting a fresh tender as per
provision of the SPW Manual, accepted the tender. While justifying the acceptance
of single tender, the Department stated in the Cabinet Memo that the scheme is a time
bound policy decision of the Government to make State Kutcha House Free and
House for all and also considering the intended purpose and larger interest, the
Government has accorded approval in principle to accept the single tender duly

6
Indian Express and Economics Times
7
Engineering Projects (India) Limited; MV Omni Projects (India) Limited; & Mungipa Trade Links
(P) Limited and Sunil Kumar Agrawal (Joint Venture)

16
 Chapter III: Economic Sector

relaxing the Clause 9(6)(vi) of the General Directions and Conditions of the Contract.
However, the Department restricted the cost of work to estimated Wholesale Price
Index (WPI) of December 2017 i.e., 43.60 per cent above the SoR of 2012 and
submitted the proposal to the Cabinet for acceptance of single tender at total cost of
₹ 379.20 crore @ ₹ 12.64 lakh per unit. The Department further justified the
premium of 43.60 per cent citing scattered location of houses, difficult terrain and
technical workability analysis. In view of the justifications provided by the
Department, the Cabinet approved (February 2017) the proposal.
The work was awarded (March 2017) to the contractor at a total cost of ₹ 379.20 crore
on turnkey basis with the stipulated date of completion by March 2019. All the 3000
houses have been completed by August 2020 and an amount of ₹ 481.45 crore has
been paid to the contractor as of October 2020, an excess payment of ₹ 102.25 crore
over the approved cost. Further scrutiny revealed that even after providing premium
of 43.60 per cent over the estimated cost, the Department provided cost escalation to
the contractor without the approval (February 2017) of the Cabinet, leading to
irregular payment to the contractor.
Further, the contention of the Department for time bound completion of the project is
not justified as only 1,340 houses (45 per cent) of houses were completed by the
targeted date of completion i.e., March 2019.
Acceptance of single tender contrary to the provision of the SPW Manual and that too
with tender premium of 43.60 per cent above the estimated cost on the pretext of time
bound construction of houses, led to extension of undue benefit ₹ 49.10 crore8 to the
contractor as another work9 was awarded (June 2017) at 25 per cent above the
estimated cost during the same period. Besides, irregular payment of ₹ 102.25 crore
towards cost escalation which was over and above cabinet approval (February 2017)
was also made.
(b) Subsequently, RDD proposed (December 2018) to construct another 3000 houses
under CMRHM Phase-II. The RDD, in gross violation of SFR, did not call any tender
for this work instead proposed to treat it as extension of CMRHM Phase-I and execute
this work through the same firm at same rate i.e., 43.60 per cent above the estimated
cost with the same design, plan specification as per terms and conditions of CMRHM
Phase I. However, the unit cost had been increased from ₹ 12.64 lakh to ₹ 14.78 lakh
without any justification.
RDD submitted (December 2018) this proposal to the Cabinet, without any
justification for the increase in the unit cost from ₹ 12.64 lakh to ₹ 14.78 lakh, which
was approved in January 2019. The work order was issued the same firm in January
2019 at a cost of ₹ 443.49 crore @ ₹ 14.78 lakh per house within 24 months (January
2021). As on February 2022, only 1,949 houses (65 per cent) have been completed
and an amount of ₹ 461.71 crore (104 per cent of the total estimated cost) has already

8
₹ 379.00 crore x 18.60%(43.60%-25%)=₹ 49.10 crore
9
Construction of Block Administrative Centre at Chongrang, West Sikkim

17
Audit Report for the year ended 31 March 2020

been paid to the contractor. Thus, excess and irregular payment of ₹ 18.22 crore was
made to the contractor without approval of the Cabinet. The quantum of this excess
payment is bound to increase as 35 per cent of the houses are still to be completed and
even with a conservative estimate, the total irregular payment would be ₹ 173.56
crore10.
Awarding the CMRHM Phase-II works without calling tenders was against provisions
of SPW Manual and compromised the principles of transparency and fair competition.
It was seen that RDD had six works to various contractors with tender premium
ranging between 37.50 per cent to 39.00 per cent during November 2020 to January
2021, which were 6.10 per cent to 4.60 per cent lower as compared to tender premium
allowed for CMRHM Phase II projects. This led to undue benefit of ₹ 14.21 crore11 to
the contractor in respect of CMRHM Phase-II project. Thus, in all, undue benefit of
₹ 63.31 crore (₹ 49.10 crore+₹ 14.21 crore) was extended to the contractor and excess
payment of ₹ 18.22 crore has been made with 65 per cent of Phase-II completed.
The fact that the contractor had agreed to execute the CMRHM Phase-II, at the rates
of Phase –I, (43.60 per cent above the estimated cost) even after gap of two years
confirms the Audit contention that the rate of Phase-I was unreasonably high. Further,
the justifications put forth by the Department to accept the single tender for the
CMRHM Phase-I, i.e. it was a time bound programme and retendering would make it
difficult to achieve the target of the Kutcha House Free State by 2018-19 were not
justified as the target dates of completion of Phase-I were not met and CMRHM
Phase-II project under which additional 3000 houses were to be constructed was
awarded only in January 2019.
The matter was reported to the Department (August 2020 and June 2021); reply was
awaited (April 2022).

Recommendation: State Government may follow the prescribed procedure given in

Sikkim Public Works Manual while executing any scheme/works to ensure
transparency and financial propriety.

RURAL DEVELOPMENT DEPARTMENT AND LAND REVENUE AND

DISASTER MANAGEMENT DEPARTMENT

3.5 Loss of revenue

Due to the lack of proper co-ordination among the departments, whereabouts of

standing properties (Trees & bamboos) valuing ₹ 5.07 crore could not be
ascertained in Audit resulting in loss of government revenue to that extent.

Land required by the Government departments and other organisations/ bodies. etc.,
for various purposes is acquired by concerned District Collectors functioning under
the administrative control of the Land Revenue and Disaster Management Department

10
1051 houses X ₹ 14.78 lakh+₹ 18.22 crore=₹ 173.56 crore
11
₹ 308.84 crore (Estimated cost without premium of 43.60%) x 4.60%(43.60%-39%)

18
 Chapter III: Economic Sector

(LRDMD) after assessing value of the land on the basis of prevailing market rate of
the land surrounding the area of the land to be acquired. In addition to values of the
land, the compensationfor standing properties is assessed and paid to the owners of
the land based on the rate of standing properties (Trees & Bamboos) time to time
fixed by the Forest Department.
The Rural Development Department (RDD) acquires land through concerned District
Collectors for construction of roads under Pradhan Mantri Gram Sadak Yojana
(PMGSY) scheme by following due procedure. Accordingly, the compensation for the
land as well as for the standing properties (trees, bamboos, broom grass bush, fodder,
other structures like cow sheds etc.) on the land so acquired is paid to the land owners.
On payment of compensation, the land along with the standing properties becomes
properties of the Government.
Scrutiny of the land acquisition records for construction of five roads for PMGSY
scheme by the RDD during March 2017 to March 2020 revealed that in addition to
land compensation, ₹ 6.94 crore was paid to the land owners towards the cost of
standing properties including properties like broom grass bush (amliso), fodder,
cowshed etc. having meagre or no sale value. A further compensation of ₹ 5.07 crore
paid for other substantially valued properties such as trees, and bamboo poles as
detailed in Appendix 3.2.
During the course of Audit, physical verification (March 2021) of four works12 out of
these five works was conducted in the presence of departmental officers to verify the
status of works and existence of standing properties in work sites and it was found
that all the four road construction works were already completed and there were no
records of safe custody and subsequent sale of standing properties valued at ₹ 5.07
crore.
In this connection, reply was sought from land acquiring Department (RDD) and
value of land and standing properties assessing Department (LRDMD) for the above
works. RDD in its reply stated that the Forest& Environment Department (F&ED) is
fully responsible for felling and disposing off the standing properties (Trees &
bamboos). It was, further, stated that if the standing properties were not taken away
by the concerned authority, then the usual practice is that the land owners take the
standing properties themselves. The LRDMD also stated that the F&ED is responsible
for removal, sales and realisation of sales proceeds from standing properties (trees and
bamboos) on the land acquired by various State Government Departments.
The F&ED in its reply stated that the land acquiring department (RDD) as of January
2022 had not made any correspondence with F&ED for removal, sales and realisation
of revenue from standing properties (Trees and Bamboos) involved in any PMGSY
road construction works.

12
(i)Mangalbarey to Arubotey, (ii) Chakung-Khaniserbong SPWD road to Lower
Khaniserbong,(iii)Upper Gelling to Middle Gelling and(iv)Chakung-Khaniserbong SPWD Road
to Mendogaon

19
Audit Report for the year ended 31 March 2020

Further, a similar audit observation (Paragraph no. 2.4) pertaining to Roads and
Bridges Department had featured in Audit Report 2013-14 on which the Public
Accounts Committee had recommended vide its 126th Report (presented to the house
on 02 April 2022), that the Department should work out a mechanism in consultation
with Finance Department and Forest & Environment Department for proper
realisation of Government revenue.
Thus, due to the lack of proper co-ordination among the departments, revenue from
sale of these Trees & bamboos valued at ₹ 5.07 crore was lost.
Recommendation: The F&ED should be immediately informed for felling and
disposal of standing properties whenever land is acquired by Government
Departments, etc. for construction works.
URBAN DEVELOPMENT DEPARTMENT

3.6 Loss of revenue

Due to non-handing over of Restaurant and Public Plaza to a firm to whom the
allotment order to run these facilities on rent basis had been duly issued, resulted
in loss of government revenue amounting to ₹ 47.06 lakh.
With a view to bring about coherent improvement in city life of Gangtok, which is
major eco-tourism destination, the Urban Development Department (UDD),
Government of Sikkim constructed ‘Construction of Walkways, Viewpoint including
Allied works at Namnang, Gangtok’ at a cost of ₹ 17.54 crore which was
subsequently revised (February 2014) to ₹ 22.59 crore. As a part of project, a
Restaurant and Public Plaza were also constructed in order to service the users of the
Walkway. The project was completed during March 2017. The UDD conducted the
valuation for these facilities during July 2017 for renting out to entrepreneurs.
Accordingly, the offset price for letting out these facilities on rent was assessed at
₹ 1,24,039 per month (Restaurant and Public Plaza at ₹ 88,157 and ₹ 35,882 per
month respectively).
As per records available in the UDD, six entrepreneurs had submitted (May 2017)
applications requesting the UDD to allot these facilities. Thereafter the UDD invited
quotations from these five entrepreneurs in October 2017. However, against five
entrepreneurs, the quotation from only three entrepreneurs13 were received and the
quotations were opened in November 2017. The rate quoted by M/s Cacao Bakery
(Firm) was found to be highest at ₹ 1.81 lakh per month. Thereafter the proposal for
allotment of the facilities at monthly rent of ₹ 1.81 lakh along with Security Deposit
of ₹ 4.47 lakh to the firm for period of 10 years was approved on 01 December 2017.
Audit scrutiny revealed (January 2020) that the order for allotment of the facilities on
rental basis for 10 years (from the date of signing of agreement) in favour of the firm
was issued in January 2018, and the firm was asked to deposit ₹ 4.47 lakh as Security

13
M/s Cacao Bakery,Mr Jigmee Dorjee Bhutia and Mr Karma Wangdi Bhutia

20
 Chapter III: Economic Sector

Deposit. The firm accepted the allotment order in January 2018 and paid the Security
Deposit in February 2018. However, for two years, the UDD did not hand over the
facilities to the firm.
After two years, the Department cancelled the allotment in March 2020 and initiated
the process for re-allotment of the facilities through Notice Inviting Tender
(05.11.2020). Initially there was no taker for the offer of NIT. The Department
retendered (07.12.2020) the two separate properties Restaurant and Open Cafeteria
and based on tendering, Restaurant was allotted (June 2021) to the highest three
bidders at a monthly rental of ₹ 47,000. Further, the Open Cafeteria was handed over
to a Self-Help Group i.e. DAY /NULUM, UDD was the Nodal Department of DAY
NULUM for period of ten years commencing from 31 January 2022. Hence, the
monthly estimated rentals were reduced by ₹ 1.34 lakh.
The Department, however, stated (August 2021) that the firm failed to execute the
agreement and cancelled the allotment in March 2020. The Department added that
the agreement could not be executed due to enforcement of Model Code of Conduct
for Assembly Election in the beginning of the 2019, and the lockdown in the State due
to Covid-19 in 2020.
The reply of the Department is self-contradictory and reasons advanced by the
Department for non-execution of agreement were not factually correct as both the
events14i.e., Model Code of Conduct for Assembly Election (during 2019) and the
Covid-19 (during 2020) had occurred more than one year after issue of allotment
letter to the selected firm.
Thus, due to non-allotment of the facilities, even though the allotment order for
renting the Restaurant and Public Plaza had been issued, resulted in loss of revenue
amounting to ₹ 47.06 lakh (₹ 1.81 lakh per month x 26 month from February 2018 to
March 2020) upto March 2020 and a recurring loss of ₹ 16.08 lakh per annum15 for
the next eight years.
Recommendation: The Department may fix responsibility of the authorities
concerned in a time bound manner for loss of revenue to the State Exchequer.

14
Model code of conduct for Assembly Elections and lock down for Covid 19 were enforced from
March 2019 and March 2020 respectively.
15
₹ 16.08 lakh for 8 years = 1.81 lakh – 0.47 lakh = 1.34 lakh loss per year for 12 years

21
 CHAPTER IV
ECONOMIC SECTOR
(Public Sector Undertakings)
 Chapter IV: Economic Sector (PSUs)

CHAPTER IV
ECONOMIC SECTOR
(PUBLIC SECTOR UNDERTAKINGS)

4.1 Functioning of State Public Sector Undertakings (PSUs)

4.1.1 Introduction
The Public Sector Undertakings (PSUs) consist of the State Government Companies
and Statutory Corporations. The PSUs are established to carry out economic and
commercial activities for the overall development of the State and its people. As on
31 March 2020, there were 16 PSUs (12 working Government Companies and four
working Statutory Corporations) under the audit purview of the Comptroller and
Auditor General of India (CAG). Besides, there were six non-working PSUs for
which audit entrustment had not been extended to CAG by the State Government as
detailed in Paragraph 4.1.10 the details of the PSUs in Sikkim as on 31 March 2020
are given in Table 4.1.
Table 4.1: Total number of PSUs as on 31 March 2020
Type of PSUs Working PSUs
Government Companies registered under Sikkim16 Registration of 08
Companies Act, 1961
Government Companies registered under Companies Act17, 2013 04
Statutory Corporations 04
Total 16
None of the 12 working Government companies were listed on the stock exchange.
During the year 2019-20, no new PSU was incorporated and no existing PSU was
closed down.

4.1.2 Investment in PSUs

4.1.2.1 State Governments investment in PSUs
The State’s investment in its PSUs was by way of share capital and long term loans.
As on 31 March 202018, the investment of the State Government (capital and long
term loans) in 16 PSUs amounted to ₹ 49.93 crore19 as detailed in Table 4.2 below:

16
Audited by CAG on entrustment basis under section 20(1) of CAG (DPC)’s Act 1971
17
The Companies Act 2013/1956 had not been extended to the state of Sikkim. Hence, these four
companies have their registered offices in New Delhi and Darjeeling (West Bengal).
18
Except of Sikkim Poultry Development Corporation Limited (2017-18), Sikkim Hatcheries Limited
(2017-18), Sikkim Livestock Processing and Development Corporation Limited (2013-14)
19
Investment figures are provisional and as provided by the PSUs except two PSUs (Sl. No. A8 and
A9 of Appendix 4.1.1) for which investment figures have been adopted from their finalised
accounts for 2018-19.

23
Audit Report for the year ended 31 March 2020

Table 4.2: Details of total investment in 16 PSUs

(₹ in crore)
Year Equity Capital Long Term Loans Total Investment
2015-16 86.61 2.03 88.64
2019-2020 47.90 2.03 49.93

The total investment consisted of 95.93 per cent in capital and 4.07 per cent in long
term loans. The investment had decreased by 43.67 per cent from ₹ 88.64 crore
(2015-16) to ₹ 49.93 crore (2019-20) as shown in Chart 4.1.
Chart 4.1: Status of State Government Investment in PSUs during last five years

Investment (Capital and Long-term loans)

100
88.64
90.33
(₹ in crore)

48.21 49.93
41.85

This reduction in State’s investment was mainly due to liquidation of six PSUs21
involving aggregate investment of ₹ 51.20 crore.
4.1.2.2 Sector-wise investment in PSUs
The details of combined investment by the State Government and other stakeholders
(Central Government, holding companies, Banks, Financial institutions, etc.) in PSUs
under various important sectors at the end of 31 March 2016 and 31 March 2020 are
given in Table 4.3:
Table 4.3: Sector-wise investment in PSUs
(₹ in crore)
Name of Sector Government Companies Statutory Total
Corporation Investment
2015-16 2019-20 2015-16 2019-20 2015-16 2019-20
Power 11112.87 17569.60 0 0 11112.87 17569.60
Finance 46.95 113.34 55.52 137.27 102.47 250.61
Service 6.59 6.46 1.61 301.20 8.20 307.66
Infrastructure 153.67 333.41 0 0 153.67 333.41
Manufacturing 43.13 0 13.04 0 56.17 0
Agriculture & Allied 1.16 1.16 0 0 1.16 1.16
Total 11364.37 18023.97 70.17 438.47 11434.54 18462.44

It may be seen from Table 4.3 that during 2019-20, the thrust of PSU-investment was
mainly in power sector companies22, which constituted more than 95 per cent of the

20
The decrease was due to liquidation of six PSUs
21
Sikkim Floor Mills Limited (₹ 2.44 crore), Chandmari Workshop and Automobiles Limited (₹ 0.3
crore), Sikkim Jewels Limited (₹ 14.47 crore), Sikkim Times Corporation (₹ 23.49 crore), Sikkim
Precision Industries Limited (₹ 4.39 crore), Sikkim Mining Corporation (₹ 6.11 crore).
22
Serial No. A-8,9,10 and 11 of Appendix 4.1.1

24
 Chapter IV: Economic Sector (PSUs)

investment (₹ 18462.44 crore) in the PSUs. During the period of five years (2015-16 to
2019-20) investment in power sector PSUs has increased by ₹ 6,456.73 crore from
₹ 11112.87 crore (2015-16) to ₹ 17,569.60 crore (2019-20). The investment in power
sector PSUs had mainly increased due to addition of ₹ 13,384.41 crore against ‘equity
capital’ and ‘long term loans’ of two new power sector PSUs23, which were covered
under the definition of a State Government Company in August 2015.
4.1.3 Reconciliation with Finance Accounts
The figures in respect of equity, loans and guarantees outstanding as per the records
of PSUs should agree with that of the figures appearing in the Finance Accounts of
the State. In case, the figures do not agree, the Finance Department and the PSUs
concerned should carry out reconciliation of differences in figures. The position in
this regard as of 31 March 2020 is given in Table 4.4.
Table 4.4: Variation between Finance Accounts and records of PSUs
(₹ in crore)
Outstanding in Amount as per Finance Amount as per records of Difference
respect of Accounts PSUs

Equity 43.70 47.90 4.20

Loans 37.03 2.03 35.00
Guarantees 3394.34 511.72 2882.62

As on 31 March 2020, there were unreconciled differences in the figures of equity

(₹ 4.20 crore), loan (₹ 35 crore) and guarantee (₹ 2882.62 crore) as per two sets of
records. The differences in equity occurred in respect of seven PSUs24. Further, the
difference in guarantee figures related to four PSUs namely SC, ST & OBC
Development Corporation Limited, Sikkim Industrial Development and Investment
Corporation Limited, Sikkim Power Investment Corporation Limited and State
Trading Corporation of Sikkim.
As regards Loan figures, Audit noticed that the Finance Department disbursed the
loans to various Departments of the State Government for different sectoral activities
and booked the amount sector-wise in the Finance Accounts. In turn, the Departments
disburse these loans to respective PSUs functioning under their administrative control.
Hence, PSU-wise figures of State Government loans provided to various PSUs were
not available in the State Finance Accounts. The State Government loan (₹ 37.03
crore) booked in the Finance Accounts pertained to the PSUs25 under Infrastructure
(₹ 2.03 crore) and power sector (₹ 35.00 crore).
Though the process of reconciliation of these differences have been initiated
(September 2018) by the Office of the Sr. Deputy Accountant General (A&E), Sikkim
in consultation with the Finance Department, Government of Sikkim and PSUs
concerned, no significant progress has been achieved in this regard.

23
Teesta Urja Limited (equity: ₹ 3,205.39 crore; long term loans: ₹ 8,830.06 crore) and Teesta
Valley Power Transmission Limited (equity: ₹ 388.45 crore; long term loans: ₹ 960.51 crore).
24
PSUs at Sl. Nos. A.4, A5, A7,A10, A11, A12 and B14 of Appendix 4.1.1
25
A5 to A7 (Infrastructure sector) and A8 to A11 (Power sector) of Appendix 4.1.1

25
Audit Report for the year ended 31 March 2020

The State Government and the PSUs concerned may take concrete steps to reconcile
the differences in a time-bound manner. The Government should correct the system of
financing the PSUs and the Finance Accounts be updated.
4.1.4 Special support and guarantees to PSUs during the year
The State Government provides financial support to PSUs in various forms through
annual budgetary allocations. The details of budgetary outgo towards equity, loans,
grants/ subsidies, loans written-off and interest waived along with the position of
guarantee in respect of PSUs are given in Table 4.5 for three years ending2019-20.
Table 4.5: Details regarding budgetary support to PSUs
(₹ in crore)
Sl. Particulars 2017-18 2018-19 2019-2026
No. No. of Amount No. of Amount No. of Amount
PSUs PSUs PSUs
1. Equity Capital outgo from
budget 0 0 2 6.02 1 2.50
2. Loans given from budget 0 0 0 0 0 0
3. Grants/Subsidy from budget 2 11.6 2 10.79 1 6.50
Total 2 11.6 2 16.81 2 9.00
4 Waiver of loans and interest 1 0.06 1 0.14 1 1.63
5 Guarantees issued 2 133.04 3 342.33 1 106.50
6 Guarantee Commitment 2 71.74 2 117.33 0 92.78

It may be seen from Table 4.5 above that budgetary outgo to PSUs has decreased
from ₹ 11.60 crore (2017-18) to ₹ 9.00 crore (2019-20) during the period from
2017-18 to 2019-20. During 2019-20 the State Government infused equity amounting
to ₹ 2.50 crore in one PSU namely Sikkim Power Development Corporation Limited
(SPDC). The State Government did not provide any loans to PSUs during the three
year period.
In 2018-19, the State Government provided grants amounting to ₹ 10.79 crore to two
PSUs (namely Temi Tea Estate₹ 8.79 crore and Namchi Smart City Limited
₹ 2 crore). During 2019-20, the recipient of Government grants (₹ 6.50 crore)
included Temi Tea Estate (₹ 6.50 crore). It can be noticed from Table 4.5 above that
during 2019-20, the Guarantee commitment decreased by ₹ 24.55 crore from
₹ 117.33 crore (2018-19) to 92.78 crore (2019-20).
4.1.5 Accountability framework
The Companies Act, 2013 and the erstwhile Companies Act, 1956 had not been
extended to the State of Sikkim. Out of 12 Government Companies existing in the
State of Sikkim, four companies were registered under the Companies Act, 1956/2013
while remaining eight were registered under the ‘Registration of Companies Act,
Sikkim, 1961’. The four companies registered and governed by the Companies Act,
2013/1956 included Teesta Urja Limited (TUL), Teestavalley Power Transmission

26
As on 31.03.2020 except of Sikkim Poultry Development Corporation Limited (2017-18), Sikkim
Hatcheries Limited (2017-18), Sikkim Livestock Processing and Development Corporation Limited
(2013-14)

26
 Chapter IV: Economic Sector (PSUs)

Limited (TPTL), Namchi Smart City Limited (NSCL) and Gangtok Smart City
Development Limited (GSCDL).
During the year 2015-16, one State Government Company27 acquired 51 per cent of
equity share capital of Teesta Urja Limited (TUL), which is the Holding company of
Teestavalley Power Transmission Limited (TPTL). The other two companies,
i.e,Namchi Smart City Limited (NSCL) and Gangtok Smart City Development
Limited (GSCDL) were incorporated during 2016-17 and 2017-18 by the State
Government under the Companies Act, 2013 with headquarters in Darjeeling, West
Bengal. Thus, all these four companies are covered under the definition of State
Government company owned and controlled (directly or indirectly) by the State
Government.
4.1.5.1 Statutory Audit/Supplementary Audit
The accounts of eight State Government Companies registered under the ‘Registration
of Companies Act, Sikkim, 1961’ are audited by Statutory Auditors (Chartered
Accountants) directly appointed by the Board of Directors (BoDs) of the respective
Companies. In addition to the statutory audit conducted by the Statutory Auditors,
supplementary audit of these Companies were being conducted by the Comptroller
and Auditor General of India (CAG) on the request of the Governor of the State under
Section 20 (1) of the Comptroller and Auditor General’s (Duties, Powers and
Conditions of Service) Act, 1971.
The accounts of four Companies registered under Companies Act, 2013/1956 are
audited by Statutory Auditors (Chartered Accountants) who are appointed by the
CAG. In addition to the statutory audit conducted by the Statutory Auditors,
supplementary audit of these Companies is conducted by the CAG under Section
143(6)(a) of the Companies Act, 201328.
Besides, there are four Statutory Corporations in the State, namely, State Bank of
Sikkim, State Trading Corporation of Sikkim, Government Fruit Preservation Factory
and Temi Tea Estate established under the proclamation of the erstwhile Chogyal
(King) of Sikkim. The accounts of these Corporations are audited by the Chartered
Accountants directly appointed by the Board of Directors (BoDs) of the respective
Corporations. Supplementary Audit of these Corporations was taken up by CAG under
Section 20(1)29 of the CAG’s (Duties, Powers and Conditions of Service) Act, 1971.
4.1.5.2 Role of Government and Legislature
The State Government exercises control over the affairs of these PSUs through its
administrative departments. The Government appoints the Chief Executives and
Directors on the Board of these PSUs.

27
Sikkim Power Investment Corporation Limited
28
The audit of accounts of the Government Companies from the financial year 2014-15 onwards is
governed by the Companies Act, 2013.
29
Based on the entrustment/request for the audit of the accounts of these corporations from the
Governor of the State from time to time.

27
Audit Report for the year ended 31 March 2020

The State Legislature also monitors the accounting and utilisation of Government
investments in the PSUs. For this purpose, the Annual Accounts of the State
Government Companies together with the Statutory Auditors report and Separate Audit
Reports of CAG are required to be placed before the Legislature under Section 20 (1) of
the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act,
1971. The Annual Reports of four Government Companies incorporated under the
Companies Act, 2013/1956 together with the Statutory Auditors Reports and comments
of CAG thereon are to be placed before the legislature under Section 396 of the
Companies Act, 2013. Similarly, the Annual Reports of the Statutory Corporations
along with the Separate Audit Reports of CAG are required to be placed before the
Legislature as per the stipulations made under Section 20(1) of the Comptroller and
Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971.
4.1.6 Arrears in Finalisation of accounts
In respect of four companies registered under the Companies Act, 2013/1956, the
financial statements of the companies are required to be finalised within six months of
the end of the financial year i.e. by September end in accordance with the provisions
of Section 96(1) of the Companies Act, 2013. Failure to do so may attract penal
provisions under Section 99 of Companies Act, 2013.
As regards eight companies registered under the Registration of Companies Act,
Sikkim, 1961 and four Statutory Corporations, there is no stipulated timeframe for
finalisation of financial statements in their respective governing Acts.
Table 4.6 provides the details of progress made by PSUs in finalisation of their
accounts as of 30 September 2020.
Table 4.6: Position relating to finalisation of accounts of PSUs
Sl. No. Particulars 2015-16 2016-17 2017-18 2018-19 2019-20
1. Number of Working PSUs 12 12 16 16 16
2. Number of accounts finalised 8 14 7 39 10
during the year
3. Number of accounts in arrears 31 29 4630 22 27
4. Number of Working PSUs with 8 9 13 12 14
arrears in accounts
5. Extent of arrears (numbers in 1 to 7 1 to 8 1 to 9 1 to 6 1 to 6
years)
As can be seen from Table 4.6, the arrear of accounts of PSUs had increased due to
non- finalisation of accounts by four PSUs during the year. As on 30 September
2020, the accounts of only two (Sikkim Power Investment Corporation Limited and
Teestavalley Power Transmission Limited) out of 16 working SPSEs were up-to-date
and remaining 27 accounts of 14SPSEs were pending for finalisation.
Non-preparation or delayed preparation of accounts is fraught with the risk of
misappropriation of assets, intentional or unintentional errors or omission in receipts
and payments.

30
Includes 2016-17 accounts of Namchi Smart City. However, the company combined the 2016-17
and 2017-18 accounts with permission from registrar as it was incorporated only in March 2017.

28
 Chapter IV: Economic Sector (PSUs)

The delays in finalisation of accounts were mainly due to delay in compilation/

adoption of accounts by the Board of Directors of the respective PSUs. The
administrative departments of the PSUs concerned have the responsibility to oversee
the activities of these entities and to ensure that the accounts of these PSUs are
finalised and adopted within the stipulated period. The departments concerned were
informed regularly (on quarterly basis) about the arrears in finalisation of accounts by
these PSUs. As a result, there was significant reduction in arrears of accounts during
2019-20 as compared to previous year except for 2018-19.
Recommendations
• The State Government may fix time frame of submission of annual account for
the companies registered under the Registration of Companies Act, Sikkim,
1961 and may also set up a special cell to oversee the clearance of arrears
and set the targets for individual PSUs, which may be monitored by the cell;
• The Administrative Departments overseeing the SPSEs (registered under the
Companies Act, 2013/1956) having backlog of Accounts need to ensure that
these SPSEs finalise and adopt their Accounts within the stipulated period,
failing which financial support to them be reviewed.
4.1.7 Placement of Separate Audit Reports
Table 4.7shows the status of placement of Separate Audit Reports (SARs) issued by
the CAG (up to 30 September 2020) on the accounts of Statutory Corporations in the
State Legislature.
Table 4.7: Status of placement of SARs in Legislature
Sl. Name of Statutory Year up to which Year for which SARs not placed in Legislature Reasons
No. Corporations SARs placed in for delay
Legislature Year of Date of issue to the Management/
SAR Government for printing
1 State Bank of Sikkim 2016-17 2017-18 23.12.2019 Nil
2 State Trading 2018-19 - - -
Corporation of Sikkim
3 Government Fruit 2011-12 to - - -
Preservation Factory 2017-18

Timely placement of SARs in the State Legislature is important to ensure timely

reporting on the functioning of the Corporation to the stakeholders and fix
accountability of the Management for its performance.
However, it can be noticed from the Table above that one SAR relating to one
Corporation (SBS) was pending for placement for more than nine months, since it was
issued to the State Government and no reasons for this delay were intimated.
Recommendations:
• The State Government may ensure that existing vacancies in the accounts
department of PSUs are timely filled up with persons having domain expertise
and experience;
• The PSUs may get the figures of equity and loans reconciled with the State
Government Departments and arrear of accounts are cleared.

29
Audit Report for the year ended 31 March 2020

4.1.8 Performance of PSUs as per their latest finalised accounts

The financial position and working results of working Government companies and
Statutory Corporations are detailed in Appendix 4.1. A ratio of PSUs turnover to
State Gross Domestic Product (GSDP) shows the extent of PSUs activities in the State
economy. Table 4.8 provides the details of working PSUs turnover and GSDP for a
period of five years ending 2019-20.
Table 4.8: Details of PSUs turnover vis-à-vis State GDP
(₹ in crore)
Particulars 2015-16 2016-17 2017-18 2018-19 2019-20
Turnover31 178.81 185.64 290.83 2,119.51 2518.51
GSDP32 18,034 20,687 25971 28723 32496
Percentage of PSUs Turnover to GSDP 0.99 0.90 1.12 7.38 7.75
Source: GSDP- MoSPI, (GSDP for years 2018-19and 2019-20) are Provisional figures and Quick estimates respectively

As can be noticed from Table 4.1.8, the PSU-turnover as well as GSDP have shown
increasing trend during the period of five years from 2015-16 to 2019-20. During
2019-20, a growth (₹ 399crore) in PSU-turnover was recorded mainly due to increase
of ₹ 394.93 crore in the turnover of two power sector companies and one Statutory
Corporation in finance sector PSU33 during the year. This had correspondingly
increased PSU-turnover to GSDP from 7.38 per cent (2018-19) to 7.75 per cent
(2019-20).
4.1.8.1 Key parameters
Some other key parameters of PSUs performance as per their latest finalised accounts
as on 30 September of the respective years are given in Table 4.9 below.
Table 4.9: Debt Turnover Ratio relating to the PSUs of the State
(₹ in crore)
Particulars 2015-16 2016-17 2017-18 2018-19 2019-20
Debt 8,936.15 12,225.77 14,080.24 13,284.89 13468.47
Turnover34 178.81 185.64 290.83 2,119.51 2518.51
Debt-turnover Ratio 49.98:1 65.86:1 48.41:1 6.27:1 5.35:1
Interest Payments 176.90 338.11 474.89 1,533.90 1725.66
Accumulated losses 328.73 798.14 756.05 2,089.94 2266.61

Debt-Turnover Ratio
A low debt-to-turnover ratio (DTR) demonstrates a good balance between debt and
income. Conversely, a high DTR can signal having too much of debt against the
income of PSUs from core activities. Thus, the PSUs having lower DTR are more
likely to comfortably manage their debt servicing and repayments. The DTR had

31
Turnover of working PSUs as per the latest finalised accounts as of 30 September of respective
year.
32
Source: Department of Economic, Statistics, Monitoring and Evaluation, Government of Sikkim.
33
The two power sector PSUs i.e. Teestavalley Power Transmission Limited and Sikkim Power
Investment Corporation Limited had registered the turnover of ₹ 300.43 (2019-20) and ₹ 223.81
(2019-20) crore finalised as on 30 September 2020 as compared to the turnover of ₹ 81.53 crore
(2018-19) and ₹ 78.40 crore (2017-18) finalised as on 30 September 2019. Further, one
Corporation in finance sector i.e. State Bank of Sikkim had registered the turnover of ₹ 188.86
(2018-19)as compared to the turnover of ₹ 157.54 crore (2017-18)
34
Turnover of working PSUs as per their latest finalised accounts as on 30 September of respective
year.

30
 Chapter IV: Economic Sector (PSUs)

decreased from 49.98:1 in 2015-16 to 5.35:1 in 2019-20. The decrease in DTR was
due to increase in turnover since 2018-19.
PSU Debt
During the period of five years, the PSUs debt had registered an overall increase of
₹ 4532.32 crore (150.72 per cent) from ₹ 8936.15 crore (2015-16) to ₹ 13,468.47 crore
(2019-20). Major portion of PSU debts during 2019-20(95.38 per cent) pertained to
power sector PSUs.35
Further, during 2019-20, the PSU Turnover had shown growth of ₹ 2,339.71 crore
(1,308.48 per cent) from ₹ 178.81 crore (2015-16) to ₹ 2,518.51 crore (2019-20)
mainly due to significant appreciation in PSU-turnover after commencement of
operations of Teesta Urja Limited and Teestavalley Power Transmission Limited
which registered aggregate turnover of ₹ 1,913.95 crore36 (2019-20) as compared to
₹ 75.47 crore (2017-18).
During the last five years (2015-16 to 2019-20), the accumulated losses of PSUs had
registered an overall increase of ₹ 1,937.88 crore from ₹ 328.73 crore (2015-16) to
₹ 2,266.61 crore (2019-20). Major portion (₹ 2266.85 crore) of these accumulated
losses was contributed by three power sector PSUs.37
4.1.8.2 Erosion of capital due to losses
The aggregate paid-up capital and accumulated losses of 16 working PSUs as per their
latest finalised accounts as on 30 September 2020 were ₹ 3,713.39 crore and
(-) ₹ 2,266.61 crore respectively (Appendix 4.1.1), which included accumulated losses
(₹ 3.23 crore) of four38 PSUs which did not have any capital. Return on Equity (RoE) of
five39 out of 12 PSUs was 11.07per cent while three PSUs was negative. The
accumulated losses (₹ 1119.52 crore) of remaining four40 PSUs had completely eroded
their paid up capital (₹ 73.50 crore) and hence, RoE of these PSUs was not workable.
The primary erosion of paid up capital was in respect of four PSUs as detailed in the
Table 4.10:
Table 4.10: PSUs with primary erosion of paid up capital
(₹ in crore)
Name of PSU Latest finalised Paid up Accumulated
accounts capital losses
Sikkim Hatcheries Limited 2017-18 0.46 (-) 2.71
Sikkim Livestock Processing and Development 2013-14 0.69 (-) 1.04
Corporation Limited
Sikkim Power Investment Corporation Limited 2019-20 0.01 (-) 1000.30
Sikkim Power Development Corporation 2018-19 72.34 115.47
Limited

35
A8 to A11 of Appendix 4.1.1
36
Turnover of two power sector PSUs as per their latest finalised accounts as on 30 September 2020.
37
A8, A10 and A11 of Appendix 4.1.1
38
A1, A6, B15 and B16 of Appendix 4.1.1
39
A5, A9, A12, B13 and B14 of Appendix 4.1.1
40
A2, A3, A10 and A11 of Appendix 4.1.1

31
Audit Report for the year ended 31 March 2020

Accumulation of huge losses by these PSUs had eroded public wealth, which is a
cause of serious concern and the State Government needs to review the working of
these PSUs to either improve their profitability or close their operations.
During the year 2019-20, out of 16 working PSUs, seven41 PSUs earned an aggregate
profit of ₹ 59.28 crore, while nine PSUs incurred loss of ₹ 498.04 crore. Thus, there
was aggregate net loss of ₹ 438.76 crore. The details of major contributors to overall
profits and losses of working PSUs are given in Table 4.11:
Table 4.11: Major contributors to profits and losses of working PSUs
(₹ in crore)
Name of PSU Latest finalised accounts Profit (+)/ loss (-)
Teestavalley Power Transmission Limited 2019-20 (+) 34.19
State Bank of Sikkim 2018-19 (+) 23.24
Teesta Urja Limited 2018-19 (-) 313.06
Sikkim Power Investment Corporation Limited 2019-20 (-) 184.31

The overall position of net losses incurred by the working PSUs from 2015-16 to
2019-20 as per their latest finalised accounts as of 30 September of the respective
years has been depicted below in Chart 4.2.
Chart 4.2: Overall losses of working PSUs
(₹ in crore)

-100

-200 -80.21 (8)

(8)
-300 -438.76
-400
-331.21 -319.01
(12
-500 (9) (16
-567.36
-600
2015-16 2016-17 2017-18 2018-19 2019-20

Overall losses incurred during the year by the working PSUs

(Figures in brackets show the number of working PSUs in respective years)
From the Chart above, it can be seen that the working PSUs overall had incurred net
losses during all the five years under reference. These losses of working PSUs during
five years were mainly attributable to heavy losses incurred by the power sector PSUs
during these years, which ranged between ₹ 84.11 crore (2015-16) and ₹ 463.21 crore
(2019-20).
4.1.8.3 Return on Capital Employed
Return on Capital Employed (ROCE) is a profitability metric that measures the long
term profitability and efficiency of the total capital employed by a company.
Companies create value when they generate returns on the capital employed. ROCE is

41
A4, A5, A8,,A9, A10, A11, A12,,B13,B14 and B15 of Appendix 4.1.1

32
 Chapter IV: Economic Sector (PSUs)

an important decision metric for long term lenders. ROCE is calculated by dividing a
company’s earnings before interest and taxes (EBIT) by the capital employed42.
During 2019-20, the overall Capital Employed in 16 working PSUs as per their latest
accounts was ₹ 15,054.90 crore while the ROCE of the PSUs ranged from
(-) 200 per cent (Sikkim Hatcheries Limited) to (+) 68.89 per cent (Government
Fruits Preservation Factory). Further, out of 16 working PSUs, only ten PSUs43 had
positive ROCE (Appendix- 4.1).
4.1.9 Return on Investment on the basis of Present Value of Investment
The Rate of Real Return (RoRR) measures the profitability and efficiency with which
equity and similar non-interest bearing capital have been employed, after adjusting
them for their time value. To determine the RoRR on Government investments in the
State PSUs, the investment of State Government in the form of equity, interest free
loans and grants / subsidies given by the State Government for operational and
management expenses less the disinvestments has been considered and indexed to
their present value (PV) and summated. The RoRR is then calculated by dividing the
Profit After Tax (PAT) of the PSUs by the sum of the PV of the Government
investments.
During 2019-20, as per their latest finalised accounts, out of 1044 working PSUs
where State Government had made direct investment, five PSUs incurred loss, four
PSUs earned profit and one PSU had negligible loss. On the basis of return on
historical value, the State Government investment had eroded by 218.05 per cent as of
2019-20. As per the RoRR where the PV of investment is considered, the State
Government investment eroded by 82.80 per cent as shown in Appendix 4.2.
This difference in percentage of investment erosion was on account of the adjustment
made in the investment amount for time value of money.
4.1.10 Winding up of non-working PSUs
There were six non-working PSUs (five Companies45 and one Statutory
Corporation46) for which audit entrustment to CAG had expired between 2003-04 and
2016-17. Since the audit of these six non-working PSUs has not been entrusted to
CAG during 2019-20, the present report has not covered their functioning.
The Government Companies in Sikkim are registered under the Registration of
Companies Act Sikkim, 1961 while Statutory Corporations are governed by the
proclamation of the erstwhile Chogyal (King) of Sikkim. There was, however, no

42
Capital employed = Paid up share capital + free reserves and surplus + long term loans –
accumulated losses - deferred revenue expenditure.
43
Serial No.A4, A5, A8, A9, A10, A12, B13 and B14
44
Excluding six PSUs at Sl. NoA1, A2. A8, A9, B15 and B16 of Appendix 4.1 which had not direct
investment of the State Government.
45
Sikkim Flour Mills Limited and Chandmari Workshop and Automobiles Limited (2002-03), Sikkim
Jewels Limited and Sikkim Times Corporation (2010-2011) and Sikkim Precision Industries
Limited (2012-13).
46
Sikkim Mining Corporation Limited (2016-17)

33
Audit Report for the year ended 31 March 2020

prescribed procedure for liquidation of Government Companies/ Statutory

Corporations under their respective governing Act/ Statute.
As per the latest available information, the assets of the three out of six non-working
PSUs (all companies) had been disposed off and the proceeds remitted (December
2012) to the Government of Sikkim. The liquidation of one non-working PSU
(Sikkim Mining Corporation) was approved (October 2016) by the Department of
Mines, Minerals and Geology, Government of Sikkim and its liabilities (₹ 6.85 crore)
were also waived (October 2016).

4.1.11 Impact of Audit Comments on Annual Accounts of PSUs

Seven PSUs47 forwarded their 09 audited accounts to Principal Accountant General
(Audit), Sikkim (PAG) during the year 2019-20 (October 2019 to September 2020)
out of which 09 Accounts of seven PSUs were taken up for supplementary audit. The
audit certificate under Companies Act 2013 for two PSUs and SARs in respect of five
PSUs (Company/ Corporations48) were issued.
The details of aggregate money value of comments of statutory auditors and CAG for
last three years (2017-18 to 2019-20) are given in Table 4.12.
Table 4.12: Impact of audit comments on working Companies
(₹ in crore)
Sl. Particulars 2017-18 2018-19 2019-20
No. No. of Amount No. of Amount No. of Amount
accounts accounts accounts
1. Decrease in profit 2 2.84 3 1.69 349 1.03
2. Increase in loss 0 0 1 0.50 4 89.65
3. Non-disclosure of 0 0 2 34.97 3 328.48
material facts
4. Errors of classification 1 2.05 0 0 0 0

4.1.11.1 Gist of some important comments of the statutory auditors and CAG in
respect of accounts of the PSUs are as under:
(i) Sikkim Power Investment Corporation Limited (2019-20)
• SPICL erroneously accounted ₹ 49.52 crore as revenue instead of equity
capital infused by Government of Sikkim. This resulted in understatement of “Share
Capital (Share application money pending allotment)” and Accumulated losses” by
₹ 49.52 crore each.
• SPICL failed to provide for diminution in value of investment leading to
overstatement of “Investments” and understatement of “Provision for losses” by ₹ 50
crore each.
(ii) State Trading Corporation of Sikkim (2018-19)
STCS did not account the appreciation in the value of Land from ₹ 0.03 crore to
₹ 2.56 crore in violation of the provisions of paragraph 13.7 of Accounting Standard
47
SBS, TPTL, STCS, SPDC, SABCCO, - One Accounts each, GSCDL and SPICL– Two Accounts each,
48
STCS, SBS (Corporations), SPICL (2 Accounts), SPDC and SABCCO,
49
SBS (2018-19), STCS (2018-19), SABCCO (2014-15)

34
 Chapter IV: Economic Sector (PSUs)

10. This has resulted in understatement of “Land” and ‘Reserves and Surplus-
Revaluation Reserves’ by ₹ 2.56 crore each.
(iii) State Bank of Sikkim (2018-19)
The Cash Balances of the Government of Sikkim of ₹ 38.78 crore with the bank was
depicted as ₹ 70.20 crore in the Finance Account. The difference of ₹ 31.42 crore has
neither been reconciled nor the fact disclosed under the ‘notes to accounts’ of the
Financial Statements of the Bank.
4.1.12 Follow up action on Audit Reports
4.1.12.1 Submission of Explanatory notes
The Report of the CAG represents the culmination of the process of audit scrutiny. It
is, therefore, necessary that they elicit appropriate and timely response from the
executive authorities. According to instructions issued by the Finance Department, all
the administrative departments concerned were required to furnish ‘explanatory notes’
on the paragraphs/ performance audits included in the Audit Reports of the CAG
within a period of three months of their presentation to the Legislature, in the
prescribed format without waiting for any questionnaires from the Public Accounts
Committee (PAC). The status of receipts of explanatory notes to
paragraphs/performance audits from the State Government/Administrative
Departments concerned are as follows:
Table 4.13: Explanatory notes not received (as on 30 September 2020)
Year of the Audit Date of Total Performance Number of PAs/ Paragraphs
Report placement of Audits (PAs) and for which explanatory notes
Audit Report in Paragraphs appeared were not received
the State in the Audit Report
Legislature Pas Paragraphs PAs Paragraphs
2013-14 17 March 2015 1 4 0 1
2014-15 28 March 2016 0 2 0 0
2015-16 18 March 2017 1 1 1 1
2016-17 12 July 2018 1 0 1 NA
2017-18 2 August 2019 0 4 NA 4
2018-19 8 December 2021 0 2 NA 2
TOTAL - 3 11 2 8

From the Table 4.13, it may be seen that the ‘explanatory notes’ to eight paragraphs
and two performance audits (PA), which pertained to eight Companies/
Corporations/Co-operative50, had not been received (October 2020).
4.1.12.2 Discussion of Audit Reports by Public Accounts Committee
In the state of Sikkim, there is no separate Committee on Public Sector Undertakings
to discuss the audit findings on State PSUs. As such, the Public Accounts Committee
(PAC) also discusses the findings relating to PSUs. The status of discussion of

50
Serial No. A-1, A-4, A-5, A-7, A-10 and B-13 of Appendix 4.1

35
Audit Report for the year ended 31 March 2020

Performance Audit and Compliance Audit Paragraphs (relating to PSUs) featured in

Audit Reports by the PAC as on 30 September 2020 has been detailed in Table 4.14.
Table 4.14: Performance Audits/ Paras relating to PSUs featured in Audit Reports vis-à-vis
discussed as on 30 September 2020
Year of Audit Number of PAs/paragraphs
Report Appeared in Audit Report Paras discussed
PAs Paragraphs PAs Paragraphs
2011-12 1 4 1 1
2012-13 0 2 Nil Nil
2013-14 1 4 Nil Nil
2014-15 0 2 Nil Nil
2015-16 1 1 Nil Nil
2016-17 1 0 Nil Nil
2017-18 0 4 Nil Nil
2018-19 0 02 Nil Nil
Total 4 19 Nil Nil
It can be seen from the Table 4.13, that eight Audit Reports containing four
performance audits and 19 paragraphs relating to the PSUs were placed in the State
Legislature. As on 30 September 2020, one performance audit relating Audit Report
2011-12 placed in the State Legislature was discussed by the PAC during 2019-20.
4.1.12.3 Compliance to Reports of Public Accounts Committee
As of October 2020, PAC had issued total two PAC Reports containing two
recommendations relating to Audit Reports for the years 2010-11 (one
recommendation) and 2011-12 (one recommendation), which were presented in the
State Legislature. Action Taken Notes (ATNs) against one recommendation relating
to Audit Report for the year 2011-12 has not been received from the concerned PSU.
It is recommended that the Government may ensure:
(a) furnishing of replies/explanatory notes to Paragraphs/ Performance Audits and
ATNs on the recommendations of PAC as per the prescribed time schedule;
(b) recovery of loss/ outstanding advances/ overpayments within the prescribed
period;
(c) revamping of the system of responding to audit observations.
4.1.13 Coverage of this Report
This Chapter on PSU contains one compliance audit paragraph pertaining to State
Trading Corporation of Sikkim (STCS) which is under the administrative control of
the Industries Department.

36
 Chapter IV: Economic Sector (PSUs)

COMPLIANCE AUDIT PARAGRAPH

State Trading Corporation of Sikkim
4.2 Extension of undue benefit to supplier
The State Trading Corporation of Sikkim (STCS) extended undue benefit to the
tune of ₹ 2.09 croreto a supplier by accepting revision of prices after the
scheduled date of supply and granting ineligible advance.
State Trading Corporation of Sikkim (STCS) was established (1972) under the
proclamation of the erstwhile Chogyal of Sikkim with the main objective of
promoting external and internal trade in Sikkim. STCS functions as a canalising
agency for procurements of the various departments of the Government of Sikkim
besides rendering agency services to Indian Oil Corporation Limited for retail
distribution of Liquefied Petroleum Gas. STCS procures goods for the Government
Departments and charges commission for the same.
Rural Development Department (RDD) of Sikkim Government placed (7 September
2018) a supply order on STCS for 8,22,549 meters of GI Pipes of different sizes
including fittings valuing ₹ 20.06 crore51 for implementation of the Rural Water
Supply Schemes (RWSS) under National Rural Drinking Water Program (NRDWP)
for the period 2018-19. The supply order stipulated that the supplies should be
completed within 90 days (by 06 December 2018). The RDD also released
(7 September 2018) an advance of ₹ 10.65 crore to STCS.
The STCS placed a supply order on same day (7 September 2018) with M/s. Indus
Tubes Ltd, New Delhi for supply of 7,75,949 meters of GI Pipes52 including fittings
valuing ₹ 20.64 crore. The price for the order was based on the rate fixed by STCS in
February 2018. The supply order was placed with a condition that the supplies should
be effected within 60 days i.e. 5 November 2018. The supplier accepted (8 September
2018) the order and demanded an advance of 40 per cent of ₹ 8.03 crore (total cost
₹ 20.04 crore) which was paid by the STCS on 10 September 2018.
The supplier informed STCS (06 November 2018), that the price of steel had
increased and consequently sought revision in the price of GI Pipes. Accordingly,
STCS revised (15 November 2018) the price and the supplier commenced supplies
from 16 November 2018 at revised higher prices. The supply was completed by
03 January 2020 after a delay of 423 days.
In this connection, audit observed the following:
a. After receiving supply order from the RDD, the STCS forwarded the supply
order to M/s Indus Tubes, Delhi without calling tender as there existed a rate
contract for supply between STCS and the M/s Indus Tubes on the rated fixed by
STCS on February 2018.

51
GI Pipes (different sizes): ₹ 18.53 crore and GI Pipe Fittings: ₹ 1.53 crore
52
7,75,949 metre of GI pipes cost ₹ 18.53 crore

37
Audit Report for the year ended 31 March 2020

b. As per Clause 3 of terms and conditions of supply order, the supply was to
commence immediately and completed within 60 days (by 5 November 2018)
from date of supply order. The supplier while (08 September 2018)
acknowledging the supply order requested for advance of ₹ 8.03 crore, conveyed
that they would try their best to supply the GI Pipes within scheduled date and
added that though the steel prices were increasing but they were not demanding
any increase in price. The STCS agreed to grant advance on basis of assurance of
the supplier. However, the supplier subsequently intimated STCS on
06 November 2018 (i.e. after scheduled date of completion of supply) that the
price of steel had increased and consequently sought revision in the price. The
STCS failed to take cognizance of the assurance given by the supplier and agreed
to enhance the price on 15 November 2018. Thus, undue benefit was extended to
the supplier. The supplier commenced supplies only from 16 November 2018.
The STCS failed to monitor timelines in delivery of goods by the supplier and
also did not counter the claim for price increase by the supplier made after the
scheduled date of supply was already over. This resulted in loss amounting to
₹ 51.34 lakh to state exchequer as detailed in Appendix-4.3.
c. As per Clause 8 of terms and conditions of supply order, 40 percent payment
shall be released against proof of delivery to the handling contractor of STCS at
Siliguri and the balance 60 percent after receipt of confirmation from RDD.
Instead, STCS released 40 per cent of the payment on 10 September 2018 as
advance. However, the supplier commenced deliveries belatedly from
16 November 2018 and completed the supplies only on 03 January 2020. Hence,
STCS extended undue benefit to the supplier by extending ineligible advance of
₹ 8.03 crore for a period of 479 days53. The STCS also did not levy any interest
on the advance, in violation of the directions issued by the Central Vigilance
Commission, thereby giving an additional undue advantage of ₹ 1.05 crore to the
supplier, calculated @10 per cent per annum.
d. Further, STCS deviated from the standard practise in the instant case by not
including any penalty clause to ensure timely delivery, as was done in other
supply orders issued by STCS. As such, though the supplier delayed the supplies,
despite receiving advance of ₹ 8.03 crore, STCS could not levy any penalty on
the supplier.
Thus, STCS failed to monitor the supply of materials within stipulated deadline
as per order and accepted the rate revision without analysing the conditions of the
contract. It also failed to include the enabling clause in the supply order under
which STCS could take penal actions in case of breach of the contract agreement.

53
11 September 2018 to 02 January 2020

38
 Chapter IV: Economic Sector (PSUs)

These collectively resulted in extending undue benefit to the supplier of

₹ 2.09 crore54, including interest on the advance and penalty for delayed supply,
to the supplier.
STCS in its reply (June 2021) stated that there was a clerical error in the supply order
because of which delivery period has been mentioned as 60 days instead of 90 days.
Further, STCS does not have a handling agent in Siliguri and the supply order did not
contain penalty clause for delay as usually supplier’s bills are settled after
considerable delay without penalty payment. It is further stated that as per statutory
Clause 4 of the supply order, the rates shall remain firm except for the statutory
variation in cost of Steel and zinc on production of evidence from SAIL due to which
rate revision requested by the supplier was accepted.
The reply is not justified as STCS did not rectify the clerical error though it had the
opportunity to correct the same while issuing revised supply order in January 2019.
Also as per records, STCS had a handling agent in Siliguri. In the instant case, STCS
provided 40 per cent interest free advance to the supplier before commencement of
supply. However, revision in rates was done beyond the supply window of 60 days
and the supply was delayed by 423 days.
Recommendation: The State Government should initiate steps for time bound fixing
of responsibility for extending of the undue favour to the supplier and recover the
amount from the supplier.

54
₹ 51.34 lakh (Cost escalation) +₹ 1.05 crore (Interest on Advance)+₹ 52.69 lakh (Penalty
@ 5 per cent as per PWD (R&B) notification dated 01 August 2012

39
 CHAPTER V
REVENUE SECTOR
 Chapter V: Revenue Sector

CHAPTER V
REVENUE SECTOR
5.1 Trend of revenue receipts
5.1.1 The Revenue Receipts of the State Government comprise,
Tax and non-tax revenues raised by the Government of Sikkim,
State’s Share of Net Proceeds of divisible Union taxes and duties assigned
to the State, and
Grants-in-aid received from the Government of India.
The details along with the corresponding figures for the preceding four years have
been depicted in Table 5.1:
Table 5.1: Trend of Revenue Receipts
(₹ in crore)
Sl. 2015-16 2016-17 2017-18 2018-19 2019-20
No.
I Revenue raised by the State Government
• Tax revenue 566.82 652.56 688.33 892.92 970.41
• Non-tax revenue 412.99 451.64 654.38 657.78 693.40
Total 979.81 1,104.20 1,342.71 1,550.70. 1,663.81
II Receipts from Government of India
• State’s share of net proceeds 1,870.28 2,069.19 2,634.66 2,794.67 2,295.56
of divisible Union taxes
• Grants-in-aid 934.20 1,436.91 1,235.42 1,574.99 881.90
Total 2,804.48 3,506.10 3,870.08 4,369.66 3,177.46
III Total receipts of State 3,784.29 4,610.30 5,212.79 5,920.36 4,841.27
Government (I + II)
IV Percentage of I to III 26 24 26 26 34
(Source: Finance Accounts, Government of Sikkim)
Revenue Receipts of the State increased by 27.93 per cent from ₹ 3784.29 crore in
2015-16 to ₹ 4841.27 crore in 2019-20 at an annual average rate of 5.59 per cent.
During 2019-20, Revenue Receipts decreased by ₹ 1079.09 crore (-18.23 per cent) as
compared to the previous year, mainly on account of decrease in Grants-in-aid.
About 34.36 per cent of Revenue Receipts during 2019-20 came from State’s Own
Resources while Central Tax Transfers and Grants-in-aid together contributed
65.63 per cent.
Tax Revenue raised by the State constituted 20.04 per cent of Revenue Receipts and
increased by ₹ 77.49 crore during 2019-20, recording a growth of 8.68 per cent over
the previous year. Non-Tax Revenue of the State in 2019-20 constituting
14.32 per cent of the total Revenue Receipts, has increased by ₹ 35.62 crore with
growth rate of 5.42 per cent over the previous year.
5.1.2 The details of the tax revenue raised during the period from 2015-16 to 2019-20
are given in Table 5.2.

41
 Audit Report for the year ended 31 March 2020

Table 5.2: Details of Tax Revenue realised

(₹ in crore)
Sl. Head of revenue 2015-16 2016-17 2017-18 2018-19 2019-20 % of
No. increase (+)
or decrease (-)
in
2019-20 over
2018-19
BE Actual BE Actual BE Actual BE Actual BE Actual BE Actual
1 State Goods and Not Applicable 0.00 171.39 253.07 405.72 415.00 454.89 64 12
Services Tax (SGST)
2 Goods and Service Not Applicable - 00 110.58 00 235.00 00 113 0
Tax (Compensation)
3 Sales Tax/Value 300.00 325.72 361.00 364.82 388.26 249.66 154.00 188.20 200.00 197.63 30 5
Added Tax (VAT)
4 Taxes on Income and 8.51 7.92 9.00 7.82 10.00 8.04 10.00 10.57 15.00 15.17 50 44
Expenditure other than
Corporation Tax
5 State Excise 135.00 142.08 144.45 156.24 155.00 150.47 158.54 183.09 237.00 207.15 49 13
6 Stamps and 7.64 8.51 7.64 12.57 7.82 13.57 13.34 14.95 16.14 13.30 21 -11
Registration Fees
7 Taxes on Vehicles 21.07 22.36 24.00 24.90 28.50 29.37 31.05 33.10 49.15 41.08 58 24
8 Other Taxes and 81.26 58.38 93.07 79.82 72.84 58.39 32.63 48.21 44.32 36.79 36 -24
Duties on
Commodities and
Services
9 Land Revenue 6.89 1.85 6.89 6.39 7.09 7.44 7.10 9.08 8.60 4.40 21 -51
Total 560.37 566.82 646.05 652.56 669.51 688.33 770.31 892.92 1220.21 970.41 58 8.68
* BE: Budget Estimates, Source: Estimate of Receipts, Finance Department, GoS and Finance Accounts 2019-20
It can be seen from the above table that during 2019-20, the actual realisation was
20.47 per cent lower than the Budget Estimates (BE). In respect of GST
(Compensation), against the BE of ₹ 235.00 crore, there was no receipt during
2019-20. Out of remaining eight heads of revenue, in six heads, the actual realisations
were less than BEs. The percentage of realisation under different heads ranged
between (-) 100 per cent to 9.61 per cent of the BE which indicated that the budget
was not prepared based on realistic estimates.
Tax Revenue increased by ₹ 77.49 crore (8.68 per cent) in 2019-20 as compared to
previous year, the increase was mainly contributed by ‘State Goods and Services Tax’
(SGST) by ₹ 49.17 crore (12.12 per cent), State Excise by ₹ 24.06 crore (13.14 per
cent) and Other Taxes on Income and Expenditure by ₹ 4.6 crore (43.52 per cent).
The respective departments reported the following reasons for variations:
State Excise: Increase was mainly due to increase in production and sale of alcoholic
products as well as extensive inspection by Excise officials.
State Goods and Services Tax: Increase was mainly due to enhancement in business
turnover of existing tax payers and proper monitoring on taxable transactions
In respect of the other revenue heads, the departments concerned did not furnish reasons
for variations.
5.1.3 The details of the non-tax revenue raised during the period 2015-16 to 2019-20 are
given in Table 5.3:

42
 Chapter V: Revenue Sector

Table 5.3: Details of Non-Tax Revenue realised

(₹ in crore)
Sl. Head of revenue 2015-16 2016-17 2017-18 2018-19 2019-20 Percentage of
No. increase (+) or
decrease (-) in
2019-20 over
2018-19
BE Actual BE Actual BE Actual BE Actual BE Actual BE Actual
1 Power 125.1 147.68 140.10 170.04 160.10 310.26 190.10 269.44 320.10 256.37 68.4 -4.9
2 Interest receipts 31.21 72.52 37.21 78.38 50.41 114.76 50.41 125.33 86.25 143.82 71.1 14.8
3 Police 55.35 61.68 52.42 41.43 52.74 45.39 57.11 46.64 88.12 86.77 54.3 86.0
4 Road Transport 39.35 41.55 47.00 48.71 55.00 52.08 59.00 53.96 65.00 57.10 10.2 5.8
5 Forestry and Wild 12.06 12.79 12.06 16.02 13.50 14.21 13.50 17.53 17.50 15.78 29.6 -10.0
Life
6 Other 10.40 7.30 2.38 9.32 4.83 5.30 7.79 5.04 23.23 12.65 198.2 151.0
Administrative
Services
7 Public Works 6.83 4.25 4.22 8.65 4.37 15.38 4.59 28.01 14.65 23.13 219.2 -17.4
8 Plantations 5.18 3.86 5.18 5.21 5.18 2.19 7.00 2.41 2.50 2.00 -64.3 -17.0
9 Water Supply and 3.99 3.80 4.26 4.04 5.00 4.88 10.00 4.29 8.00 4.92 -20.0 14.7
Sanitation
10 Tourism 3.14 3.96 3.80 5.42 4.50 5.14 4.64 6.16 5.33 11.67 14.9 89.4
11 Medical and 2.50 2.15 2.50 2.59 2.50 2.11 2.50 2.37 5.75 2.48 130.0 4.6
Public Health
12 Other Rural 1.50 0.94 1.50 0.51 1.50 0.91 1.50 0.98 1.65 0.31 10.0 -68.4
Development
Programmes
13 Stationery and 2.03 1.83 1.81 2.16 1.85 3.08 1.95 1.52 3.10 2.60 59.0 71.1
Printing
14 Crop Husbandry 0.91 0.70 0.91 0.57 0.91 0.34 0.63 0.37 0.69 0.68 9.5 83.8
15 Education, 1.17 1.16 1.12 2.05 1.15 2.31 1.17 2.32 1.32 3.55 12.8 53.0
Sports, Art and
Culture
16 State Gross --* --*
Lotteries Net 37.40 20.02 33.55 45.00 50.00 55.03 55.00 57.82 40.00 40.10 -27.3 -30.6
(SL)
17 Others 12.24 26.80 12.24 11.54 12.92 21.01 15.03 33.59 27.85 29.47 85.3 -12.3
Total 350.36 412.99 362.26 451.64 426.46 654.38 481.92 657.78 711.04 693.4 47.5 5.4
(with net figures of SL)
Source: Finance Accounts 2019-20 and Estimate of Receipts, Finance Department, GoS.
* Gross figures of State Lotteries have not been furnished by the Department for 2015-20. Since gross
figures of State Lotteries have not been reflected for the year 2015-20, percentage increase/decrease has
not been calculated.
It appears from the above table that the actual realisation was 2.48 per cent less
than the BEs. The percentage of realisation under different heads ranged between
(-) 81.21 per cent to 169.94 per cent of the BE which indicated that the budget was
not prepared based on realistic estimates.
Non-tax revenue increased by ₹ 35.62 crore (5.42 per cent) in 2019-20 over the
previous year. The increase was attributed to receipts under Police by ₹ 40.13 crore
(86 per cent), Interest Receipts by 18.49 crore (14.75 per cent) and Tourism by
₹ 5.51 crore (89 per cent). The increase was offset by decrease mainly under State
Lotteries by ₹ 17.72 crore (31 per cent).
The respective departments reported the following reasons for variations:
Water supply and sanitation: Increase in revenue was mainly due to addition of new
connections, recovery of old dues and other receipts from sewerage, water testing,
sewerage cleaning etc.
Power: Decrease in revenue was due to closure of tourism related activities with the
onset of Covid-19.

43
Audit Report for the year ended 31 March 2020

Other Rural Development Programmes: Decrease was due to non-sanctioning of new

works as the first quarter of the FY 2019-20 was engaged in General Election and Vote
on Account was effective wherein only payments related to Salaries and GIAs were
done. Therefore, the major source of revenue like Storage Charge and Tender Fee could
not be realised.
Education: Increase was due to collection of registration and renewal fees from Private
Schools and also sale of tender forms, teachers’ recruitment exam application fees, five
per cent storage charge deducted from work bills paid from the fund parked outside the
Government.
State Lotteries: Decrease was due to decline of online lottery business.
In respect of other revenue heads, the departments concerned did not furnish reasons for
variations.
5.2 Revenue and return filling trends
5.2.1.1 GST Revenue of Government of Sikkim: Comparison between budget
estimates and actual receipts
The comparison of budget estimates and the corresponding actual collection of Goods
and Service Tax (GST) during the period from 2017-18 to 2019-20 are shown in
Table 5.4.
Table 5.4: Revenue from GST during 2017-18, 2018-19 and 2019-20
(₹ in crore)
55
Year Budget Estimates (BE) Revised Estimates (RE) Actuals

State GST State GST State GST

2017-18 - 221.99 171.39

2018-19 253.07 253.07 405.72

2019-20 415.00 415.00 454.89

Source: Budget estimates
It could be seen from above table that, the actual collection of revenue from SGST in
2017-18 was short of the target and during 2018-19 and 2019-20 the revenue
collection under SGST exceeded the estimate.
5.2.1.2 Compensation under GST
As per the GST Act, any shortfall in revenue by the State is required to be compensated
by the Central Government. Compensation under GST (Compensation to the States)
Act 2017 is payable when the actual revenue collected by the State under GST and pre-
GST arrears is less than the projected revenue. In Sikkim the actual revenue collected
was more than the projected revenue, hence compensation was not payable to Sikkim
during 2017-18 to 2019-20. Details are shown in Table 5.5.

55
GST data on Budget Estimates for the Financial year 2017-18 is not applicable as GST was
implemented from July 2017

44
 Chapter V: Revenue Sector

Table 5.5: Projected Revenue figure for compensation and actual collection of SGST
(₹ in crore)
Sl. No. Year Projected Revenue SGST collection along with pre-GST
arrears
1 2017-18 239.24 264.76
2 2018-19 363.65 428.00
3 2019-20 414.56 454.89
Source: State Finance Audit Report for the year ended March 2020
5.2.1.3 Trends of Integrated GST apportionment to the State and its cross utilisation
The Integrated GST (IGST) collected will be apportioned between the Centre and the
State where the goods or services are consumed. The revenue will be apportioned to
the Centre at the CGST rate, and the remaining amount will be apportioned to the
consuming State.
The trends of IGST apportionment to the State and its cross utilisation are given in
Table 5.6.
Table 5.6: Integrated Goods and Services Tax
(₹ in crore)
IGST component 2017-18 2018-19 2019-20
IGST56 apportioned to the State as per Section 17 of 11.00 39.87 8.28
IGST Act, 2017
IGST provisionally/ad-hoc apportioned to the State 23.16 45.84 63.58
IGST cross utilised between
SGST57 as IGST (+)24.05 (+)52.93 (+)49.39
IGST as SGST (-)77.41 (-)194.18 (-)262.98
Source: Sanction letters (for settlement of IGST) of Ministry of Finance
5.2.1.4 Registration under GST
The category-wise registrations under GST as on 31 March 2020 have been given in
Table 5.7 below:
Table 5.7: Details of GST registrations upto 31 March 2020

Category of Registrant No. of Registrants Percentage of total

Normal taxpayers 7,507 86.21
Composition taxpayers 830 9.53
Tax Deductors at Source 314 3.61
Tax Collectors at Source 52 0.60
Input Service Distributors 4 0.05
Others (Casual, NRTP, OIDAR) 1 0.01
Total Registrants 8,708 100
Source: GSTN Daily summary reports as on 31 March 2020

The total registrations under GST were 8,708, of which normal taxpayers accounted
for 86.21 per cent and composition taxpayers were around 9.53 per cent. Of the total
registrations, 2,473 were migrated from pre-GST regime, accounting for around
28.40 per cent, while balance were new registrations.

56
IGST: It is a tax collected by the Central Government for an inter-State sale
57
SGST: It is a tax collected by the State Government for an intra-State sale

45
Audit Report for the year ended 31 March 2020

5.2.1.5 GST Return filling pattern of GSTR-1 and GSTR-3B

The trends of filing of GSTR-1 and GSTR-3B as on 30 June 2020 for the period from
April 2019 to March 2020, as compiled from the summary reports shared by GSTN,
have been depicted in Table 5.8.
The filing of GSTR-3B for April 2019 was 81 per cent while for March 2020 was
only 53 per cent. It was noticed that GSTR-3B returns were being filed within the
due date on an average by 47 per cent taxpayers and 29 per cent filed the returns after
due date. GSTR-3B returns filed within due date remained at a low ranging between
7.10 per cent and 58 per cent during April 2019 to March 2020. Thus, while it was
expected that compliance would improve as the system would stabilise with passage
of time, it was seen that there was no improvement in filing of GSTR-3B by due date.
Table 5.8: Details of return filing (GSTR-1 and GSTR-3B) during 2019-20
Return Type GSTR-1 GSTR-3B
Months Due for Returns Return Due for Returns Return Returns % filed
filing filed filing filing filed as on filing (%) filed by by due
(%) June 2020 due date date
Apr'19 4,600 2451 53.28 6,884 5,609 81.48 6,884 3,469
May'19 4,548 2442 53.69 6,969 5,587 80.17 6,969 3,620
Jun'19 7,029 5129 72.97 7,029 5,589 79.51 7,029 4,114
July'19 4,252 2430 57.15 7,130 5,648 79.21 7,130 3,674
Aug'19 4,075 2452 60.17 7,135 5,692 79.78 7,135 3,808
Sep'19 7,195 5198 72.24 7,195 5,725 79.57 7,195 3,362
Oct'19 4,095 2489 60.78 7,314 5,756 78.70 7,314 3,756
Nov'19 4,062 2490 61.30 7,403 5,779 78.06 7,403 4,147
Dec'19 7,450 5064 67.97 7,450 5,804 77.91 7,450 3,717
Jan'20 3,908 2293 58.67 7,448 5,671 76.14 7,448 3,731
Feb'20 3,729 2134 57.23 7,399 5,268 71.20 7,399 2,704
Mar'20 7,508 3273 43.59 7,508 3,994 53.20 7,508 579
Source: GSTN daily summary reports

5.3 Analysis of arrears of revenue

The arrears of revenue as on 31 March 2020 in respect of some Heads of Revenue as
reported by the departments amounted to ₹ 376.33 crore, of which, ₹ 107.33 crore was
outstanding for more than five years (as detailed in Table 5.9).
Table 5.9: Arrears of Revenue
(₹ in crore)
Sl. Head of Total amount outstanding Replies of Department
No. revenue As on 31 For more than
March 2020 five years
1 Power 368.64 104.09 Non-payment of Electricity Bills by consumers
2 Animal 0.15 - Entry tax of ₹ 34.98 lakh, due from a firm M/S Uttara
Husbandry Foods & Feed Pvt. Ltd., was only partially paid by the
firm leaving a balance of ₹ 14.58 lakh.
3 Roads and 3.37 1.94 The road machineries of the department were mostly
Bridges deployed for the departmental works. Payment was not
made despite serving several reminders for clearing the
dues.

46
 Chapter V: Revenue Sector

4 Water Supply 4.17 1.3 The house owners do not pay the bills as the bills are in
and the name of tenants who usually shift to other places.
Sanitation Old records are not available for the outstanding bills
and the defaulters are untraceable.
Total 376.33 107.33
Source: Information received from departments

5.4 Response of the departments/ Government towards Audit

The Principal Accountant General (PAG), Sikkim conducts periodical inspection of
the Government departments to test check the transactions and verify the maintenance
of the important accounts and other records as prescribed in the Rules and procedures.
Inspection Reports (IRs) incorporating irregularities detected during the inspection
and not settled on the spot are issued to the heads of the offices inspected with copies
to the next higher authorities for prompt corrective action. The heads of the offices/
departments are required to promptly comply with the observations contained in the
IRs, rectify the defects and omissions and report compliance through initial reply to
the PAG within one month from the date of issue of the IRs. Serious financial
irregularities are reported to the heads of the Department and the Government.
It was seen that 264 paragraphs involving ₹ 718.07 crore relating to 93 IRs remained
outstanding at the end of June 2020. The details along with the corresponding figures
for the preceding two years are mentioned in the following table:
Table 5.10: Details of pending Inspection Reports
Particulars June 2018 June 2019 June 2020
Number of outstanding IRs 89 96 93
Number of outstanding audit 242 256 264
observations
Amount involved (₹ in crore) 567.01 674.32 718.07

5.4.1 The department-wise details of the IRs, the audit observations outstanding as
on 30 June 2020 and the amounts involved are mentioned in the following table:
Table 5.11: Department-wise details of IRs
Sl. Name of Department Nature of Receipts No. of No. of Money
No. outstanding outstanding value
IRs Audit involved
observations (₹ in crore)
1 Finance (Commercial Taxes VAT/Taxes on Sales, Trade, 15 63 375.74
Division) etc.
2 Excise (Abkari) State Excise 8 23 17.31
3 Land Revenue and Disaster Land Revenue 19 25 0.89
Management
4 Transport (Motor Vehicles Taxes on Motor Vehicles 7 20 14.38
Division
5 Mines, Minerals and Non-ferrous Mining and 3 3 3.31
Geology Metallurgical Industries
6 Forest, Environment and Forestry and Wildlife 13 28 53.85
Wildlife Management
7 Finance (Directorate of State State Lotteries 3 8 19.25
Lotteries)
8 Urban Development and Urban Development 16 46 21.02
Housing
9 Energy and Power Power 9 48 212.32
Total 93 264 718.07

47
Audit Report for the year ended 31 March 2020

Audit did not receive even the first replies from the heads of offices within one month
from the date of issue of six numbers of IRs (issued during 2019-20) till June 2020.
Pendency of IRs due to non-receipt of the replies was indicative of heads of offices
and heads of the departments not initiating adequate action to rectify the defects,
omissions and irregularities pointed out by the PAG through IRs.
The Government may consider having an effective system for prompt and appropriate
response to audit observations.
5.4.3 Departmental Audit Committee Meetings
The Government set up audit committees to monitor and expedite the progress of the
settlement of the IRs and paragraphs in the IRs. During 2019-20, one Audit Committee
Meeting was held with Excise Department wherein 18 paragraphs involving ₹ 5.34 crore
relating to six IRs were settled.
The overall progress on settlement of paragraphs needs to be improved in view of the
huge pendency of IRs and paragraphs.
5.5 Response of the departments to the draft audit paragraphs
The PAG forward the draft audit paragraphs proposed for inclusion in the Report of
the Comptroller and Auditor General of India to the Principal Secretaries/ Secretaries
of the Department concerned, drawing their attention to audit findings and requesting
them to send their response within four weeks. The fact of non-receipt of replies from
the departments/ Government is invariably indicated at the end of such paragraphs
included in the Audit Report.
Three draft paragraph proposed for inclusion in the Audit Report of the Comptroller
and Auditor General of India for the year ended March 2020 were forwarded to the
heads of Departments through demi-official letter for which reply was received in
respect of two draft paragraphs only.
5.6 Follow up on Audit Reports - summarised position
The Rules of Procedures of the Committee on Public Accounts of the Sikkim
Legislative Assembly (internal working) lays down that after the presentation of the
Report of the Comptroller and Auditor General of India in the Legislative Assembly,
the departments shall initiate action on the audit paragraphs and the Government
should submit the action taken explanatory notes within three months of tabling the
Report for consideration of the Committee. In spite of these provisions, the
explanatory notes on the audit paragraphs of the Reports were being delayed
inordinately.
Reports of the Comptroller and Auditor General of India of the Government of
Sikkim for the years ended 31 March 2015, 2016, 2017, 2018 and 2019 containing 15
paragraphs under Revenue Sector were placed before the State Legislative Assembly
between March 2016 and December 2021. Action taken explanatory notes in respect
of nine paragraphs (excluding three from AR 2013-14) from five departments

48
 Chapter V: Revenue Sector

{Excise; Finance58; Transport (Motor Vehicles Division); Urban Development ; and

Power} had not been received for Audit Reports for the years ending 31 March 2015,
2016, 2017 and 2018.
During 2019-20, the PAC discussed one review59 from Audit Report 2011-12.

5.7 Analysis of the mechanism for dealing with issues raised by Audit
To analyse the system of addressing the issues highlighted in the IRs/ Audit Reports
by the departments/ Government, action taken on the paragraphs and Performance
Audits (PAs) included in the Audit Reports pertaining to the last 10 years in respect of
Excise Department was evaluated and included in this Report.
The succeeding paragraphs 5.7.1 to 5.7.3 discuss the performance of the Excise
Department in dealing with the cases detected in course of local audit conducted
during the last ten years and also the cases included in the Audit Reports pertaining to
the last 10 years.
5.7.1 Position of IRs
The summarised position of IRs issued during the last ten years, paragraphs included
in these Reports and their status as on 30 June 2020 are given in the following table:
Table 5.12: Position of Inspection Reports
(₹ in crore)
Year Opening balance Addition during the year Clearance during the year Closing balance

IRs Para- Money IRs Para- Money IRs Para- Money IRs Para- Money
graphs value graphs Value graphs value graphs value

2010-11 6 16 3.77 1 4 15.85 - 1 0.21 7 19 19.41

2011-12 7 19 19.41 1 6 4.05 - 1 0.005 8 24 23.46
2012-13 8 24 23.46 - - - - - - 8 24 23.46
2013-14 8 24 23.46 1 5 4.21 - 4 7.35 9 25 20.32
2014-15 9 25 20.32 1 4 11.63 - 2 2.33 10 27 29.62
2015-16 10 27 29.62 1 5 2.31 - 7 17.37 11 25 14.56
2016-17 11 25 14.56 1 3 1.31 - 1 0.2 12 27 15.67
2017-18 12 27 15.67 1 9 3.48 - - - 13 36 19.15
2018-19 13 36 19.15 - - - - - - 13 36 19.15
2019-20 13 36 19.15 1 5 3.5 - - - 14 41 22.65

The Department arranged one Departmental Audit Committee meeting wherein 18

paragraphs involving ₹ 5.34 crore relating to six IRs were settled.
5.7.2 Recovery in accepted cases
The position of paragraphs included in the Audit Reports pertaining to the last 10
years accepted by the Department and recovery effected there-against is mentioned in
the following table:

58
Commercial Taxes Division and Directorate of Sikkim State Lotteries
59
Performance Audit of Power Transmission activities of Energy and Power Department,
Government of Sikkim

49
Audit Report for the year ended 31 March 2020

Table 5.13: Details of accepted paragraphs and recovery thereof

Year of Number of Money Number of Money value Amount Cumulative
the Audit paragraphs value of the paragraphs of accepted recovered position of recovery
Report included paragraphs accepted paragraphs during the year of accepted cases
(₹ in crore) (₹ in crore) (₹ in crore) (₹ in crore)
2009-10 No paragraphs featured in the Audit Report
2010-11 02 7.71 01 0.21 Nil Nil
2011-12 No paragraphs featured in the Audit Report
2012-13 No paragraphs featured in the Audit Report
2013-14 01 0.68 Nil Nil Nil Nil
2014-15 02 5.77 02 5.77 Nil Nil
2015-16 04 5.14 02 0.29 Nil Nil
2016-17 No paragraphs featured in the Audit Report
2017-18 No paragraphs featured in the Audit Report
2018-19 No paragraphs featured in the Audit Report

It is evident from the above table that the progress of recovery even in accepted cases
was very slow during the last ten years. The recovery in accepted cases was to be
pursued as arrears recoverable from the parties concerned. The Department/
Government had not put in place any mechanism for pursuance of the accepted cases.
In the absence of a suitable mechanism, the Department could not monitor the
recovery in accepted cases.
The Department may take immediate action to pursue and monitor prompt recovery of
the dues involved in accepted cases.
5.7.3 Action taken on the recommendations accepted by the departments/
Government
The draft reports on Performance Audits (PAs)/ Thematic Audits (TAs) conducted by
the PAG are forwarded to the Government/ Department concerned for their
information with a request to furnish their replies. These PAs/ TAs are also discussed
in the exit conference and the Department’s/ Government’s views are included while
finalising the PAs/ TAs for the Audit Reports.
The following TA on ‘Collection of Revenue from State Excise’ had featured in the
Audit Report 2015-16. The details of recommendations and their status are given in
the following table:
Table 5.14: Details of recommendations and their status
Year of Name of the Details of the Recommendations Status
AR PA
2015-16 Thematic The Department needs to improve regulation i) The relevant bottling notification
Audit on of duties by proper compliance to applicable has been issued.
Collection of Acts/ Rules to prevent losses from bottling ii) The matter pertaining to wort was
Revenue fees, production of IMFL/ beer from ENA/ placed before the PAC and
from State wort. The Department also needs to enforce subsequently dropped after
Excise proper accounting of holograms by the discussion.
distilleries/breweries. iii) The Department is maintaining
proper records of Holograms and the
e-akbari online system will be
introduced shortly, which will take
care of the issue.
The Department may check and analyse i) The Department has directed the
running of distilleries/ breweries with distilleries/ breweries to make a
respect to its production capacity and actual market strategy in such a way that
production with introduction of penalty maximum production capacity is
provision. The Department may also ensure utilised. Since it depends upon the

50
 Chapter V: Revenue Sector

Year of Name of the Details of the Recommendations Status

AR PA
realisation of proportionate arrear of license demand of the brand in the market,
fees in case of revision of license fees during provision of penalty is not
the financial year. reasonable.
ii) The first phase of e-akbari online
system is implemented which covers
the renewal of license fee and issue
of new license.
The Department needs to ensure receipts of This has been noted and the process is
EVCs in time and to ensure sending of being followed.
EVCs by post to the Excise Authorities of
importing States instead of handing over to
the distilleries/breweries to ensure
genuineness of their verification.
The departmental authorities may ensure All the manufacturing units have their
receipt of samples of each and every batch own competent laboratory for testing.
of IMFL/ beer and their testing in the The Department does not have fully
Laboratory. equipped hi-tech machines. However, it
is still counter checking the products
regularly.
NB: Status as in the table is based on departmental replies received.

5.8 Audit Planning

The unit offices under various departments were categorised into high, medium and low
risk units according to their revenue position, past trends of the audit observations and
other parameters. The annual audit plan was prepared on the basis of risk analysis
which inter alia included critical issues in Government revenues and tax administration,
i.e. Budget Speech, White Paper on State Finances, Reports of the Finance Commission
(State and Central), recommendations of the Taxation Reforms Committee, statistical
analysis of the revenue earnings during the past five years, factors of the tax
administration, audit coverage and its impact during the past five years etc.
During 2019-20, there were 1060 auditable units, of which five units (50 per cent)
were planned and audited.
5.9 Results of audit
Test check of the records of five units under Revenue departments {Commercial
Taxes Division, Motor Vehicles Division, Forest and Environment Department
(Territorial circle, West), Urban Development Department and Energy and Power
Department} was carried out during the year 2019-20. It revealed irregularities
involving revenue aggregating to ₹ 1209.47 crore in 22 cases. During the course of
the year, the departments concerned accepted all the 22 observations.
5.10 Coverage of this Report
This Chapter contains one ‘Subject Specific Compliance Audit on processing of
refund claims under GST in Sikkim’ and two Compliance Audit Paragraphs involving
financial effect of ₹ 138.87 crore.

60
(i) Commercial Taxes Division (ii) Directorate of State Lotteries (iii) Motor Vehicles Division (iv)
Excise Department (v) Land Revenue Department (vi) Forest and Environment Department
Territorial Circle) (vii) Forest and Environment Department (Utilisation Circle) (viii) Mines and
Geology Department (ix) Urban Development Department (x) Energy and Power Department

51
Audit Report for the year ended 31 March 2020

COMPLIANCE AUDIT PARAGRAPHS

5.11 Subject Specific Compliance Audit on processing of refund claims
under GST in Sikkim
5.11.1 Introduction
5.11.1.1 Timely refund mechanism constitutes a crucial component of tax
administration, as it facilitates trade through release of blocked funds for working
capital, expansion and modernisation of existing business. The provisions pertaining
to refund contained in the GST laws aim to streamline and standardise the refund
procedures under GST regime. It was decided that the claim and sanctioning
procedure would be completely online. Due to non-availability of electronic refund
module on the common portal, a temporary mechanism was devised and
implemented. Circular Nos. 17/17/2017-GST dated 15 November 2017 and Circular
no. 24/24/2017-GSTdated 21 December 2017was issued, prescribing the detailed
procedures. In this electronic-cum-manual procedure, the applicants were required to
file the refund applications in Form GST RFD-01A on the common portal, take a
print out of the same and submit it physically to the jurisdictional tax office along
with all supporting documents.
5.11.1.2 The process was further simplified by allowing online submission of
refund applications in Form GST RFD-01A, along with all supporting documents vide
Circular dated 31.12.2018. However, various post submission stages of processing of
the refund applications continued to be done by manual process.
5.11.1.3 The refund procedure was made fully electronic, wherein all the steps from
submission applications to processing thereof could be undertaken electronically, with
effect from 26 September 2019 (also called Automation of Refund Process).
Accordingly, the Circulars issued earlier laying down the guidelines for manual
submission and processing of refund claims have either been superseded or modified.
In order to ensure uniformity in implementation of the provisions of law across field
formations, several earlier Circulars61 have been superseded vide the Circular dated
18.11.2019. However, the provisions of the said Circulars shall continue to apply for
all refund applications filed on the common portal before 26.09.2019 and the said
applications shall continue to be processed manually as were done prior to
deployment of the new system.
5.11.2 Audit Objectives
Audit of Refund cases under GST regime was conducted to assess:
(i) the adequacy of Act, Rules, notifications, circulars etc. issued in relation to
grant of refunds,
(ii) the compliance of extant provisions by the tax authorities and the efficacy of
the systems in place to ensure compliance by taxpayers, and

61
Circular dated 15.11.2017, dated 21.12.2017, dated 15.03.2018, dated 30.05.2018 (including
corrigendum dated 18.07.2019), dated 04.09.2018, dated 26.10.2018, dated 31.12.2018 and dated
28.03.2019.

52
 Chapter V: Revenue Sector

(iii) whether effective internal control mechanism exists to check the performance
of the Departmental officials in disposing the refund applications.
5.11.3 Audit Scope and methodology
Pan-India refund data was obtained from GSTN, and out of the total of 151 refund
cases processed involving an amount of ₹ 27.58 crore, 4362 refund cases involving an
amount of ₹ 3.26 crore from 19-9-2018 to 18-3-2020 were selected for detailed
examination by audit.
Prior to the commencement of audit, an entry conference was held on 7 December
2020, during which the objectives, scope and criteria of the audit were discussed with
the Department. After the conclusion of audit, an exit conference was held on
22 April 2021 where audit findings were discussed and the views of the Department
have been duly incorporated in the draft report
5.11.4 Audit Findings
In Sikkim, all refund cases were processed in the Commercial Taxes Division (CTD),
Finance Department, Government of Sikkim, for which a refund committee was
constituted (11.04.2018) comprising of one Joint Commissioner, three Deputy
Commissioner and one Assistant Commissioner. Before 11.04.2018, refund cases
were being verified by the Joint Commissioner and submitted to the Commissioner
for approval.
The table below brings out the extent of deficiencies noticed during the audit of
refund cases, selected for detailed audit.
Table 5.15: Deficiencies in refund cases
Nature of Audit Findings Audit Sample Number of Deficiencies as
deficiencies noticed percentage of
Sample
Number Amount (₹) Number
Delay in issue of acknowledgment 43 -- 33 76.74
Delay in issue of Refund orders 43 3.26 crore 28 65.12
and non-payment of interest
Delay in communicating refund 19 2.24 crore 15 78.95
orders to counterpart tax authority
Delay/non-conducting of post 43 -- 43 100
audit of refund claims
Sanctioning of refunds without 33 -- 15 45.45
proper checks
Discrepancies in GSTN data with 11 -- 09 81.82
the data captured in State GST
System
Audit findings are included in the subsequent paragraphs.
5.11.5 Acknowledgment not issued within time
Rule 90 (1) of SGST Rules, 2017 stipulates that where the application relates to claim
for refund from the Electronic Cash Ledger (ECL), an acknowledgement in Form
GST RFD-02 shall be made available to the applicant through the common portal

62
32 cases pertain to pre-automation period and 11 cases pertain to post-automation period.

53
Audit Report for the year ended 31 March 2020

electronically and Rule 90 (2) of SGST Rules, 2017 stipulates that for the application
related to refund other than ECL, the application shall be forward to the proper officer
within a period of 15 days of filing of the said application, who will scrutinise the
application for its completeness. An acknowledgment in Form GST RFD-02 shall be
made available to the applicant within 15 days through the common portal.
Out of 43 cases63 examined involving refund of ₹ 231.14 lakh, it was noticed that in
all the pre-automation cases (32) involving ₹ 3.51 lakh, rejection orders and refund
orders were issued without issue of acknowledgement and for the post automation
cases (11) there was delay in one case of 132 days involving refund ₹ 2,074. Thus, the
department failed to adhere to the timelines for issuing acknowledgement as
prescribed in the rules ibid.
The matter was reported to the Department (March 2021 and June 2021). The
Department, while admitting the observation for post automation cases, intimated
(April 2021) that the reason for such delay was failure of dealer’s account validation
through PMS. With reference to the pre-automation cases, the department informed
(September 2021) that during pre-automation period there was no option available in
the system for issuing acknowledgement.
The reply of the department for the pre-automation cases is not acceptable since, as
per circular No.17/17/2017-GST/Sikkim, dated 15/11/2017, all communication with
reference to acknowledgement, deficiency memo, provisional refund order etc. shall
be done manually.
5.11.6 Refund orders not sanctioned in time
Section 54 (7) of the SGST Act, 2017 stipulates that the proper officer shall issue the
order under sub-section (5) within sixty days from the date of receipt of application
complete in all respects. Further, Section 56 of Act also ibid provides that, if any tax
ordered to be refunded under sub-section (5) of section 54 to any applicant is not
refunded within sixty days from the date of receipt of application under subsection (1)
of that section, interest at such rate not exceeding six per cent as may be specified in
the notification issued by the Government on the recommendations of the Council,
shall be payable in respect of such refund from the date immediately after the expiry
of sixty days from the date of receipt of application under the said sub-section till the
date of refund of such tax.
Audit observed that in 2864 refund cases (out of 4365 cases) involving refund of ₹ 2.30
lakh, there was delay in sanction of refunds ranging from 1 to 296 days. Of these,
14 cases were delayed by 1 to 3 months, 11 cases were delayed by 3 to 6 months, and
3 cases were delayed by more than 6 months. Further, the Department did not pay
interest amounting to ₹ 4.82 lakh (₹ 0.07 lakh pertained to post automation period and
₹ 4.75 lakh pertained to pre automation period) as detailed in Appendix 5.2A and 5.2B.

63
32 pertained to pre-automation period and 11 pertained to post-automation period.
64
19 cases pertain to pre-automation period and 9 cases pertain to post automation period
65
Out of 43 refund cases, 30 claims were approved.

54
 Chapter V: Revenue Sector

The matter was reported to the Department (March 2021 and April 2021). The
Department accepted the audit observation and stated that the sanction order could not
be issued on time as various documents to be submitted by taxpayers were not
submitted online. Regarding non-payment of interest, the Department stated that the
same was not claimed by the taxpayers.
The reply of the Department is not acceptable as there was no documentary evidence
in the records/data provided to Audit to establish that any notice was issued to the
taxpayers for submission of required documents.
5.11.7 Abnormal delay in communicating refund orders to counterpart tax
authority
As per Circular No. 24/24/2017 GST dated 21/12/2017 of the Department, refund
order issued either by the central tax authority or the state tax/UT tax authority shall
be communicated to the concerned counterpart tax authority within 7 working days
for the purpose of payment of relevant sanctioned amount of tax or cess as the case
may be. It was also reiterated therein to ensure adherence to the time lines specified
under section 54 (7) and rule 91(2) of SGST Act and Rules respectively for sanction
of refund orders.
While verifying the records of transmission of refund sanction orders, it was observed
that 15 refund orders involving ₹ 0.59 crore were forwarded to the Central tax
authority with delays ranging from 10 to 16 days as detailed in Appendix 5.3.
The matter was reported to the Department (June 2021). The Department stated
(July 2021) that during the pre-automation period as the system was manual, so
documentary compliance was to be followed and delivery time for sending the
documents to disbursing authority took a longer time.
The justification furnished by the Department is not tenable as the Department was
aware that the processing of refunds was manual and the Department had itself issued
the notification in that regard.
5.11.8 Delay/non-conducting of post audit of refund claims
The CTD, Government of Sikkim circular No 17/17/2017-GST dated 15/11/2017
elaborately laid down the procedure for manual processing of refunds of zero rated
supplies. The circular inter alia, stipulated that, the pre-audit of manually processed
refund applications is not required till separate detailed guidelines are issued,
irrespective of the amount involved. However, it was clarified that the post audit of
refund order shall be continued as per the extant guidelines.
43 cases involving refund of ₹ 231.14 lakh were examined and it was noticed that
none of the cases were sent for post audit of refund claims. As a result, an important
check in the refund processing system has not been exercised.
The matter was reported to the Department (March 2021). The Department accepted
the audit observation (July 2021) and stated that audit team has not been constituted
yet; once the team is constituted the audit of refunds shall be taken up.

55
Audit Report for the year ended 31 March 2020

5.11.9 Sanctioning of Refunds without proper checks

5.11.9.1 Irregular allowance of refund of inverted duty structure
As per Circular no. 24/24/2017-GST dated 21 December 2017 of the CTD, the refund
on account of Inverted duty structure was to be supported by statements I and IA
which contained (i) calculation of maximum refund amount claimed and (ii) details of
invoices of inward and outward supplies.
Out of 5 refund cases audited pertaining to Inverted duty structure, deviations were
found in two refund cases involving refund of ₹ 18.96 lakh where the Division
granted the refunds although no such statements were furnished as detailed in
Appendix 5.4.
The Department accepted the audit observation (July 2021) and stated that statement
1A was not released in the GST portal during the said period and tax authority made
the refunds based on documents submitted by taxpayer.
The reply of the Department is not acceptable as the question of whether statements
were released in the GST portal does not arise. Both the refund cases pertained to pre-
automation period where refunds were processed manually.
5.11.9.2 Refund (post automation) sanctioned without filing of 3B returns
Section 54 (1) of SGST Act, 2017 stipulates that when a registered person is claiming
refund of any balance in the electronic cash ledger, it shall be done in accordance with
the provisions of sub-section (6) of section 49, which stipulates that the balance in the
electronic cash ledger or electronic credit ledger after payment of tax, interest,
penalty, fee or any other amount payable under this Act or the rules made thereunder
may be refunded in accordance with the provisions of Section 54. Rule 61 of Sikkim
GST Rules, 2017 stipulates filing of monthly/quarterly GSTR-3B return by normal
taxpayers for every tax period electronically through the common portal, either
directly or through a facilitation centre under Section 39 of Sikkim GSST Act, 2017.
GSTR-3B is a simplified summary return and the purpose of the return is for
taxpayers to declare their summary GST liabilities for a particular tax period and
discharge these liabilities.
Scrutiny of 11 selected cases and cross verification with GSTR 3B data revealed that in
10 cases involving refund of ₹ 7.37 lakh, refunds were sanctioned although the concerned
applicants had not furnished all GSTR 3B returns as detailed in Appendix 5.5.
The matter was reported to the Department (April 2021). The Department did not
accept the audit observation (April 2021) and stated that the refund claims are filed in
the GST common portal and the checking of filing GSTR 3B has to be ensured in the
common portal itself. The Department further intimated (21 July 2021) that the
refunds were released as there was excess balance in the cash ledger and that filing of
GSTR 3B was ignored as the taxpayers have to self-assess as provided under Section
58 of SGST Act, 2017.

56
 Chapter V: Revenue Sector

The reply of the Department is not acceptable as the refunds approving authority i.e.
the State Tax authorities should have ensured proper compliance to the relevant
provision of the Act.
5.11.9.3 Non-submission of statement in case of refunds (pre automation) of
excess payment of tax
Rule 89 (2) (k) of the SGST Rules, 2017 stipulated that the application under sub-rule
(1) shall be accompanied by a statement showing the details of the amount of claim
on account of excess payment of tax.
Out of the 3 cases audited, no such statement was submitted in any of the cases.
However, two cases involving refund of ₹ 8.78 lakh were approved and one involving
refund claim of ₹ 36 lakh was rejected on the ground that no document was received
for excess payment66as detailed in Appendix 5.6.
The matter was reported to the Department (April 2021). The Department stated (July
2021) that the excess payment under GSTR 3B was verified and the taxpayer had
submitted the amended GSTR 1 which led to refund.
The reply of the Department is not acceptable as the processing of cases during
pre-automation was manual and that two excess payment refunds were sanctioned
even though they were not accompanied by the statement showing details of amount
claimed, thereby resulting in non-adherence to Rule 89 (2) (k) of SGST Rules, 2017.
5.11.10 Discrepancies in GSTN data with the data captured in State GST system
For post automation cases, Application Reference Number (ARN) is generated after
filing of application in form GST RFD 01 and uploading the supporting documents.
The application shall be deemed to have been filed under Rule 90 (2) of SGST Rules,
2017 on the date of generation of the said ARN and the time limit of 15 days to issue
an acknowledgement would be counted from the said date. The above process of the
common portal gets transferred to the State back-end system through an Application
Programme Interface (API). In the State’s back-end system the refund applications
will be assigned to the proper officer who will continue to process these applications
up to the stage of issuance of final sanction order in Form GST RFD-06 and related
payment order in Form GST RFD-05 and after completion of the process in the state
system, the data would be again transferred to the common portal through API.
Scrutiny of the data of the state’s back-end system revealed the following:
5.11.10.1 Discrepancy in ARN date (of GSTN) and Application date (of State
GST system)
Audit noticed that in 7 cases out of 11 refund cases (post automation), the date of
ARN (as shown in GSTN) is different from the date of application (as captured in the
State’s back-end system) as detailed in Appendix 5.7.

66
AA1104190067488 and AA110218006323Y (Sanctioned)
AA110119007671Q (Rejected)

57
Audit Report for the year ended 31 March 2020

The matter was reported to the Department (March 2021). The Department while
admitting the observation replied (April 2021) that Sikkim being Model I state has a
separate system to process the application at GST common portal. Date was different
from the GST common portal because the State’s back-end system updates the date
on which the data is received and also due to frequent network outage and failure of
CRON67. The Department further intimated (July 2021) that the data is times tamped
on the receipt of data on the State’s system or Central system irrespective of the ARN
date.
The reply of the Department is not acceptable as the State’s system failed to represent
actual application date i.e. ARN date resulting in non-observance of the provision.
5.11.10.2 Discrepancy in RFD 05 date (payment order date) issued
While comparing the payment order in Form RFD 05 of the GSTN with that of the
State’s system’s data, Audit noticed that in 3 out of 11 cases, the date of RFD 05 (as
shown in GSTN) is different from the order date of RFD 05 (as captured in the State
System)as detailed in Appendix 5.8.
The matter was reported to the Department (March 2021). The Department while
admitting the observation replied (April 2021) that GST common portal date was
different from the State’s system date due to delay in data transfer through API
because of network outage and failure of CRON.
The reply of the Department is not acceptable as the State’s system failed to represent
the actual date of issue of RFD 05 resulting in non-observance of the provision.
5.11.11 Maintenance of refund register
Para 2.6 of the Circular No. 17/17/2017 – GST, dated 15 November, 2017 of the CTD
stipulated that once a refund application in FORM GST RFD-01A is received in the
office of the jurisdictional proper officer, an entry shall be made in a refund register to
be maintained for this purpose with the details such as applicant’s name, GSTIN, date
of receipt of application, period to which the claim pertains, nature of refund, amount
of refund claimed, date of issue of acknowledgement and date of receipt of complete
application.
Audit noticed that no such refund register was maintained and all the refunds prior to
automation were processed in the relevant file.
The matter was reported to the Department (June 2021). The Department replied that
the divisions were instructed to dispose of refund cases with expedition, therefore; all
the records were maintained in the file itself.
The reply of the department is not acceptable as non-maintenance of refund register
affects proper monitoring and as in contravention of the government’s instructions.

67
The software utility CRON is acronym of Command Run On, is a time-based job scheduler in
Unix-like computer operating systems.

58
 Chapter V: Revenue Sector

5.11.12 Conclusion
Audit noticed certain cases where the Department did not adhere to the prescribed
timelines leading to instances of delay in issuing of acknowledgement, sanction of
refund orders and communicating refund orders to counterpart tax authority. Further,
lack of proper scrutiny of refund claims by the jurisdictional officers led to irregular
allowance of refunds in certain cases.
In addition, certain systematic issues such as discrepancies in GSTN data with the
data captured in State’s GST back-end system were noticed.
5.11.13 Recommendations
In order to address the non-compliance to relevant provisions of the Acts and Rules
and to improve the effectiveness of the internal control system, the following
recommendations are made:
• Compliance to relevant provisions of the Act and Rules should be monitored
and ensured by CTD, Sikkim at each stage of refund process right from issue
of acknowledgement up-to the credit of refund amount into the taxpayers
account within the prescribed time limit.
• The CTD may address issues relating to auto calculation of interest in the
system in case of delay in sanction of refund.
• The CTD may consider put in place a system of post-audit of refund cases by
issuing detailed instructions/ guidelines.
• The CTD should take necessary systemic steps to ensure that the data
captured by the state’s system is fully consistent with that in the common GST
portal.

Finance Department
(Directorate of Sikkim State Lotteries)

5.12 Loss of Government revenue

The DSSL by violating the provisions of agreement, allowed the Marketing

Agent (MA) to continue the lottery draws even though the MA had failed to
deposit Minimum Assured Revenue and other dues. This led to non-recovery
of dues of ₹ 3.60 crore from the MA.
The Directorate of Sikkim State Lotteries (DSSL) invited (29 October 2018) tender
for selection and appointment of Marketing Agent (MA) for marketing and sale of 16
weekly online lotteries in three Parts i.e. Part-A (consisting of five draws), Part- B
(consisting of six draws) and Part- C (consisting of five draws). Based on tender bids,
M/s Pan India Network Ltd (PINL) was selected as MA for Part-A (five draws) and
Part- B (six draws). Similarly, M/s Summit Online (P) Ltd (SONTSPL) was selected
(March 2019) as MA for Part- C (five draws).

59
Audit Report for the year ended 31 March 2020

As per agreement, the MA was required to furnish Security Deposit (SD) in the form
of Bank Guarantee (BG) of amount equivalent to Minimum Assured Revenue (MAR),
before commencement of the first draw. The SD could be adjusted by the Government
in case the MA failed to deposit sale proceeds or such other dues to the Government.
The MA was required to pay MAR monthly on pro-rata monthly basis, without any
deductions, by 10th of every succeeding month. In addition, draw expenses @ ₹ 3,000
per draw was required to be paid to the Government. In case, MA wanted to
discontinue the operation of lotteries, 90 days’ notice was required to be given to the
Government or else was required to compensate the revenue loss to the State
Government.
Audit observed (March 2021) that M/s SONTSPL commenced (08 April 2019) selling
and marketing of five draws (Part-C) of Sikkim Online Lotteries but could not
continue and served (15 April 2019) 90 days’ notice to discontinue citing
unfavourable condition of online lottery schemes. The request of M/s SONTSPL for
termination of Agreement was accepted (1 August 2019) by the State Government.
Audit noticed that M/s PINL deposited BG of ₹ 10 crore (March 2019) and ₹ 67.90
lakh (May 2019) in respect to five Online Weekly lottery (Part-A) and sought (May
2019) time extension of one month to deposit the BG of ₹ 14.11 crore in respect to 06
Online Weekly lottery (Part- B). The request was accepted (May 2019) by the DSSL.
M/s PINL could not deposit the BG of ₹ 14.11 crore and requested (8 May 2019) the
State Government to allow to run Six Online Weekly Lottery for 90 days as per the
terms of agreement. The State Government allowed (26 July 2019) M/s PINL to
continue to operate Six Online Weekly Lottery draws for 90 days. M/s PINL,
however, informed (12 August 2019) their inability to continue to operate Six Online
Lottery and accordingly Six Online Weekly Lottery was suspended with effect from
15 May 2019 (Post Facto).
It was observed that the M/s PINL did not pay MAR and other dues to the State
Government from June 2019 with respect to five Online Weekly Lottery. As a
consequence, the State Government suspended (01 October 2019) five Online Weekly
Lottery draws from 03 October 2019 also as the MA had failed to clear the pending
liabilities of ₹ 14.91 crore. The State Government, however could recoup only ₹
10.67 crore by encashing the SD, against the total receivable amount of ₹ 14.27
crore68, leaving ₹ 3.60 crore as unrecovered as of May 2021. Besides this penal
interest (₹ 2.74 crore)69 was also recoverable as per clause 10 the agreement.
Further, as per Agreement, the State Government was responsible for payment of
prize money to winning tickets. Thus the State Government disbursed ₹ 11.67 crore
towards prize money by revoking SD (₹ 10.68 crore) and ₹ 0.99 crore from its own
funds, under the approval of Government on 09 December 2020. Later, post facto
approval (18 January 2021) of the State Cabinet was obtained.

68
₹ 14.27 crore towards (MAR- ₹ 2.46 crore; Draw Expenses- ₹ 0.14 crore; Prize Winners payment-
₹ 11.67 crore)
69
@12% from July 2019 to Feb. 2021

60
 Chapter V: Revenue Sector

The possibility to recover the dues of ₹ 3.60 crore along with interest of ₹ 2.74 crore
appears remote as M/s PINL has been declared insolvent and the Corporate
Insolvency Resolution Process has been initiated (October 2019) under provision of
Insolvency Bankruptcy Code 2016 against the company. Insolvency proceeding was
still on as of December 2021.
The DSSL failed to protect the interest of Government revenue by allowing the MA to
continue the five Online Weekly Lottery draws despite non-payment of MAR and
other dues since June 2019 which was against the stipulations of the agreement. This
resulted in undue favour to the MA and loss of revenue of ₹ 3.60 crore to the State
exchequer apart from interest of ₹ 2.74 crore.
In its reply (September 2021), DSSL stated that M/s PINL did not turn up to deposit
the dues and admitted that this has resulted in loss of revenue of ₹ 3.60 crore.

Recommendations: The Department may ensure adherence to the provisions of

agreements with marketing agents to prevent undue benefit to them and to avoid loss
to State Exchequer, and closely monitor the insolvency proceedings so as to recover
the dues to the extent possible.

5.13 Loss of revenue due to non-deduction of commission on printing works of

lotteries tickets

The DSSL failed to follow the prescribed instructions for printing works of
Government w.r.t printing works of lotteries tickets and not deducted mandatory
three per cent commission from bills of the private printing presses, resulting in loss
of revenue of ₹ 5.09 crore.
In accordance to Sub-rule 5 of Rule 3 of the Lotteries (Regulation) Rules 2010, paper
lottery tickets and the stationery on which the online lottery tickets are issued shall be
printed by the Organising State at a Government Press or any other high security press
included in the panel of the Reserve Bank of India.
With a view to streamline the system of printing work by the State Government Press,
Sikkim, the State Government vide Circular No. 90 dated 19 September 1999, in
supersession of all previous instructions issued elaborate guidelines, which inter-alia
included that: all indenting Departments to approach Printing & Stationery
Department (PSD) for printing related work by Sikkim Government Press; in case,
Government press is unable to do the work, they will arrange to get the printing done
by Private Press, listed with the PSD, for printing works valuing up to ₹ 2.00 lakh; for
all individual printing works of value exceeding ₹ 2.00 lakh, which are not possible to
be done by PSD due to any constraints, open tenders will be invited in each case and
the bills for the printing works done by Private Press has to be submitted to PSD for
certification of correctness of the rate and amount before making payment to the
Private Press.
In slight modifications of the previous Circular, the State Government vide Circular
(3 November 2004) stipulated that all the printing work will be executed by the PSD

61
Audit Report for the year ended 31 March 2020

itself. The indenting Departments were accordingly requested to obtain Performa

Invoice (PI) first from PSD and remit 90 per cent advance along with the indent for
printing work. In case, Government Press is not in a position to undertake job due to
pre-occupation or not having facilities, alternative arrangement to get the work done
by Private Press will be made as per Circular No. 90 of 19 September 1999. In such
cases, three per cent commission from the bill of the Private Press would be deducted
and credited to Government revenue as service charge.
The State Government vide Circular No. Admn 110/Ptg & Sty/45 dated 30 April 2018
stressed for getting all printing jobs done from the Government Press, in view of
upgradation of the Press to undertake multi-colour printing works. The circular
reprimanded the Departments for allotting printing jobs to the Private Presses directly
on lowest quotation basis, in violation of the standing norms issued by the
Government. The Government Departments were asked to place their indent and
obtain Performa Invoice in the first instance. In the event of non-compliance to above
procedure, request of verification of rates of Private Press would not be entertained by
the Government Press. The Circular reiterated that in exceptional cases, involving
special quality of printing jobs, for which infrastructural facilities were not available
in the Government Press or due to any other unavoidable circumstances, clearance for
carrying out printing jobs from other Printing Presses established in the State, could
be given by PSD. In such cases, three per cent administrative charges will be
deducted at source and credited to Government Revenue.
During 2015-21, the DSSL had given printing job orders to four Private Presses for
carrying out printing works involving ₹ 169.64 crore. Neither the necessary
clearances from PSD nor the mandatory deduction of administrative charges of three
per cent was affected from the bills of Private presses as detailed below:
Table 5.16: Non-deduction of administrative charges
Sl. No. Year Total printing cost 3 per cent Commission
1. 2015-16 121246000 3637380
2. 2016-17 234742750 7042282
3. 2017-18 369092662 11072780
4. 2018-19 152455400 4573662
5. 2019-20 466441600 13993248
6. 2020-21 352389600 10571688
Total 169,63,68,012 5,08,91,040

Following irregularities were noticed in Audit:

• In violation of the Government circulars, DSSL had never approached the PSD for
getting printing works of Lottery Directorate done by the Sikkim Government
Press.
• DSSL also did not invite open tenders as required under Circular dated 19
September 1999, though the value of printing works were far beyond the thresh

62
 Chapter V: Revenue Sector

hold limit of ₹ 2.00 lakh, in case it was not possible for the State Government Press
to undertake the printing works of DSSL due to any constraints.
• The bills for the printing works of DSSL done by Private Presses were not routed
through PSD for certification of correctness of the rate and amount before making
payment to the Private Presses. This is in violation of Circular dated 19 September
1999.
• The DSSL had not placed their indent and obtained Performa Invoice in the first
instance from PSD as required vide State Government Circular (April 2018).
• The DSSL had also not obtained clearance from PSD for carrying out printing jobs
from other printing presses, in case the printing works of Lottery involved special
quality of printing jobs, for which infrastructural facilities are not available in the
Government Press or due to any other unavoidable circumstances.
• The deduction of mandatory three per cent administrative charges to be deducted at
source from the bills of the Printing Presses was also not done.
As a result of failure of DSSL to follow the prescribed instructions for printing works
of Government, there was no assurance that the rates paid to the Private Presses were
competitive, since no tenders were called and the rates were not verified from the
PSD. Apart from this, there was loss of revenue of ₹ 5.09 crore of the three percent
deduction to be made from the bills.
The DSSL in its reply (September 2021) confirmed that it had not collected three
per cent commission and added that it inadvertently missed out seeking clearance
from Printing and Stationery Department. The DSSL further stated that it had taken
up the matter with Government (June 2021) for post-facto approval to regularise the
issue and assured to collect commission in all their future paper lottery printing
works. However, till March 2022 neither the post-facto approval was granted by the
State Government nor was the three per cent commission collected from private
presses.
Recommendation: The Department may fix responsibility for loss of revenue and also
initiate process for recovering the three per cent commission from the private presses.

63
 CHAPTER VI
GENERAL SECTOR
 Chapter VI: General Sector

CHAPTER VI
GENERAL SECTOR
6.1 Introduction
This Chapter of the Audit Report for the year ended 31 March 2020 deals with the
observations on audit of the State Government units under General Sector.
The names of the State Government departments and the total budget allocation and
expenditure of the State Government under General Sector during the year 2019-20
are given in the table below:
Table 6.1: Details of budget allocation and expenditure
(₹ in crore)
Sl. Name of the Department Total Budget Expenditure
No. Allocation
1. Department of Personnel 19.79 22.58
2. Election Department 25.82 24.33
3. Finance Department 2302.22 1949.38
4. Governor 10.93 10.26
5. Home Department 81.15 77.42
6. Information and Public Relation Department 12.12 11.78
7. Information Technology Department 4.97 4.23
8. Judiciary 55.99 44.95
9. Land Revenue and Disaster Management 260.08 180.63
Department
10. Law Department 2.89 2.85
11. Parliamentary Affairs Department 14.04 13.40
12. Planning & Development Department 60.78 37.41
13. Printing and Stationery Department 15.13 14.60
14. Science and Technology Department 5.88 5.26
15. Sikkim Legislature Assembly 26.21 26.08
16. Sikkim Police 527.24 474.56
17. Sikkim Public Service Commission 6.19 5.87
18. Skill Development Department 40.45 13.25
19. State Excise(Abkari) Department 13.18 11.80
20. Vigilance Department 9.63 9.60
Total 3507.57 2994.08
Source: Appropriation Accounts 2019-20
Besides the above, the Central Government had transferred a sizeable amount of
funds directly to the State’s implementing agencies under the General Sector. The
State’s implementing agencies received total fund of ₹ 15.51 crore during 2019-20 for
implementation of flagship programmes of the Central Government, the major
transfers are detailed below:

65
Audit Report for the year ended 31 March 2020

Table 6.2: Details of funds directly transferred to the implementing agencies

(₹ in lakh)
Sl. Name of the Name of the Implementing Agency Funds
No. Department Scheme/Programme transferred
during the year
1 High Court of Sikkim e-Court Phase - II Registrar General, High 161.17
Court of Sikkim
2 Land Revenue and MPs Local Area District Collector, East 750
Disaster Management Development Schemes
Department (MPLADS)
3 Science and Bio Technology Research Sikkim Manipal Institute 54.74
Technology and Development of Medical Sciences –
Department (SMIMS)
Sikkim University 93.00
State TB Cell Kazi Road 78.70
Science and Technology Sikkim Manipal Institute 5.00
Institutional and Human of Technology
Capacity Building Sikkim State Council of 120.46
Science and Technology
Sikkim University 288.34
Total 1551.41
Source: Finance Accounts 2019-20

6.2 Planning and conduct of audit

Audit process starts with the assessment of risks faced by various departments of the
Government based on expenditure incurred, criticality/complexity of activities, level
of delegated financial powers, assessment of overall internal controls, etc.
After completion of audit of each unit on a test-check basis, Inspection Reports (IRs)
containing audit observations are issued to the heads of the departments. The
departments are required to furnish replies to the audit findings within one month of
receipt of the IRs. Whenever replies are received, audit findings are either settled
based on reply/action taken or the audited entities requires to take further action for
compliance. Some of the important audit observations arising out of these IRs are
processed for inclusion in the Audit Reports of the Comptroller and Auditor General
of India. These Audit Reports are submitted to the Governor of the State under Article
151 of the Constitution of India for laying on the table of the Legislature for taking
further appropriate action.
Test audits were conducted involving expenditure of ₹ 909.91 crore (including
expenditure of ₹ 391.27 crore of previous years) of the State Government under
General Sector. The details of year-wise break-up is given in Appendix 6.1.
This Chapter contains one Performance Audit on “Direct Benefit Transfer” and one
Compliance Audit Paragraph as follows:

66
 Chapter VI: General Sector

PERFORMANCE AUDIT
Directorate of Economics, Statistics, Monitoring & Evaluation, Rural
Development Department and Social Justice & Welfare Department

6.3 Direct Benefit Transfer (covering cash transfer only)

Implementation of Direct Benefit Transfer

Direct Benefit Transfer (DBT) is a major reform initiative of the Government of India
(GoI) to ensure better and timely delivery of benefits from the Governments to the
people. A Performance Audit on DBT w.r.t (i) Indira Gandhi National Old Age
Pension Scheme (IGNOAPS), (ii) Indira Gandhi National Widow Pension Scheme
(IGNWPS), (iii) Indira Gandhi National Disability Pension Scheme (IGNDPS),
Unmarried Women Pension Schemes (UWPS) and (v) Mahatma Gandhi National
Rural Employment Guarantee Scheme (MGNREGA), revealed the following
significant findings:

Highlights
Porting of legacy data and digitization of database of beneficiaries was one of
the pre-requisites and condition of DBT to ensure direct processing and credit of
payments to the legitimate beneficiary in right account and in right time.
However, the SJWD neither utilized Central Ministry’s DBT Scheme
Management Software i.e. NSAP-PPS nor it developed its own Information and
Communication Technology for DBT. The database relating to payments to the
beneficiaries under these schemes were maintained in MS Excel and were
processed manually. Due to non-adoption of DBT Scheme Management Software
i.e. NSAP-PPS or non-development of its own IT Software for DBT by the
Department, the payment of pensions under these schemes suffered on account of
delays, non-payment of due benefits, giving rise to existence of intermediaries
like sponsoring banks that caused delays on one hand and on the other the SJWD
deprived itself of an effective Management Information System (MIS) to monitor
the actual payments to the beneficiaries.
(Paragraph 6.3.8.3(A)(i))
Direct Benefit Transfer (DBT) enables the departments and institutions to deliver
cash benefits on-line directly to beneficiaries account in a timely and effective
manner by eliminating the intermediaries and obstacle layer. However due to
involvement of multiple intermediaries, the payments of pension took conservable
time in NSAP and SIS.
(Paragraph 6.3.8.3(A)(iii))
As per DBT guideline issued by the GoI, the Department was required to collect
the Aadhaar details of beneficiaries and seed them in the beneficiary database,
the seeding of Aadhaar would enhance efficiency in the sanction, payment and
disbursement process. However, the Department has not seeded Aadhaar number
in entirety of total beneficiaries/workers both in NSAP, SIS and MGNREGA that

67
Audit Report for the year ended 31 March 2020

led to inclusion of ineligible beneficiaries, duplication of beneficiaries, etc. that

consequently resulted in irregular payments.
(Paragraph 6.3.8.3(A)(ii) &6.3.8.3(B)(i))
NSAP targets the destitute with the objective of providing a basic level of
financial support. Analysis of beneficiaries’ data viz name, account number and
drawal of IGNOAP with State Government Pension drawal data revealed that
there were ineligible beneficiaries who were drawing regular retired pension
from State Government as well as drawing the IGNOAP, besides there were
cases wherein more than one beneficiary of same household was drawing
pension under IGNOAPS, IGNWPS and UWPS.
(Paragraph6.3.8.1(C)(ii))
The guidelines on NSAP stipulate that payment of pension be done on monthly
basis. However, it was noticed that pensions were disbursed on quarterly basis
upto March 2020, even the quarterly payments were delayed due to existence of
various intermediaries. The delay in crediting the pension to beneficiaries’
accounts ranged from two to 174 days. Similarly, as per MGNREGA guideline,
final FTO have to be uploaded within 15 days and thereafter two days provided
for payment of wages through Ne-FMS system. However, it was noticed that
against the total 11,31,905 transactions involving ₹ 236.12 crore made during
2017-18 to 2020-21, 1,86,280 transactions involving ₹ 37.35 crore were delayed
i.e. the payments were made after 15 days that constituted 16 per cent of total
transactions.
(Paragraph 6.3.8.3(A)(iv)&6.3.8.3(B)(iii))
As per DBT guideline issued by the GoI, in case of failed transactions, the
Department after carrying out the required modification/rectification was
required to send the rectified files for payment again. However, an amount of
₹ 2.17 crore pertaining to the period 2017-18 to 2019-20did not reach 3,929
beneficiaries of these four selected schemes as the Department had failed to re
initiate these failed transactions. Further, SBS being sponsoring bank in 2020-21,
there was failed transaction of 752 transactions involving ₹ 19.90 lakh. Similarly
in MGNREGA, it was noticed that out of total 15,364 failed transactions
involving ₹ 3.10 crore, 14,237 transactions amounting to ₹ 2.86 crore were
re-initiated successfully, leaving a balance of 1,127 transactions amounting to
₹ 24.29 lakh which were yet to be rectified and remained pending payment as of
February 2021.
(Paragraph 6.3.8.3(A)(v)&6.3.8.3(B)(iv))
As per DBT guideline, each State should have a State DBT (SDBT) Cell to
identify DBT schemes or DBT components of schemes and classify them in i)
Cash Transfer ii) Transfer In-kind iii) Other Transfers/Processes. The SDBT Cell
was required to study the existing process flow and fund flow under each scheme
and reengineer the same wherever necessary. The SDBT cell would develop an IT

68
 Chapter VI: General Sector

based System Utility/MIS for its schemes that would provide a coherent
centralised workflow engine for field functionaries, officials and beneficiaries
and enable report generation, dynamic update of data and daily tracking of
progress. The SDBT Cell was also required to constitute a dedicated body to deal
with complaints and grievances of beneficiaries in a fair and timely manner.
However, it was noticed that State DBT Cell, State Advisory Board and DBT
Committee were not constituted and also no dedicated body to deal with
complaints and grievances of beneficiaries/workers formed. This led to delays in
payment/ non-payment of wages/ benefits to the workers/ beneficiaries in respect
of MGNREGA and NSAP.
(Paragraph 6.3.8.4(A), 6.3.8.4(B) and 6.3.8.4(C))
6.3.1 Introduction
Direct Benefit Transfer (DBT) is a major reform initiative of the Government of India
(GoI) to ensure better and timely delivery of benefits from the Governments to the
people. This marks a paradigm-shift in the process of delivering benefits like wage
payments, pensions, fuel subsidies, food grain subsidies, etc. directly into the bank
accounts of the beneficiaries, removing leakages and enhancing financial inclusion.
According to DBT, GoI website70Sikkim recorded (December 2019) score of 50.5 per
cent (Rank 24) for implementation of DBT while Haryana recorded the highest score
of 88.80 per cent (Rank 1) and West Bengal recorded the lowest score of 13.20 per
cent (Rank 36). In the State of Sikkim, 59 Schemes/Programmes were being
implemented by ten Departments wherein payments were being made through DBT
mode. The State Government Departments are using combination of multiple
platforms for DBT transfer viz five Schemes/Programmes were transferred through
PFMS platform, while 54 Schemes/Programmes through sponsoring banks/post office
respectively (shown at Appendix 6.2).
In order to implement DBT, States have been asked to set up a State DBT Cell to act
as a one-stop point to coordinate all efforts for bringing the implementation of
schemes on to DBT. The State DBT Cell is to consolidate guidelines received from
Central Ministries and disseminate them to the respective departments. It has to act as
a unity of command and provide technical support in implementation and
coordination.
The Chief Secretary to the GoS, vide Notification No. 18 Home 2013 dated 7
February 2013 notified Directorate of Economics, Statistics & Monitoring &
Evaluation (DESME) as Nodal Department to facilitate the implementation of DBT of
various welfare schemes in the State. It was seen that no State DBT Cell had
constituted in the Sikkim State, the Ministries concerned of GoI directly liaisoned
with the concerned departments of State Government. The DESME being the Nodal
Department stated (January 2021) that they forward the directives received from GoI
to the respective Departments.

70
https://dbtbharat.gov.in/state/state-ranking

69
Audit Report for the year ended 31 March 2020

The Departments implementing DBT schemes, directly received funds from

Ministries and implemented the schemes as per instructions received from their
Ministries. There was no intermediation by the State DBT Cell in the process of
implementation of DBT schemes in Sikkim. Therefore, the State DBT Cell could not
function as the nodal point for DBT operations and one-stop point for implementation
of DBT in the State. Further, the Advisory Board as required under DBT guideline
was yet to be constituted in the State and DBT Committee was also yet to be
constituted within each Department to ensure that DBT framework is adopted in
implementation of schemes.
6.3.2 Process Flow and Fund Flow under DBT
6.3.2.1 Process Flow and Fund Flow under DBT as per SOP
As per the Standard Operating Procedure (SOP) for DBT, DBT Framework has a
multi-stakeholder architecture which capitalises on the competencies of various
departments and institutions to deliver benefits to beneficiaries in a timely and
effective manner. The diagram below explains how different stakeholders work
together to facilitate a holistic environment for successful implementation of DBT
system.
Chart 6.3.1: DBT Process (SOP)

Ministry/ Department: IT team:

Identification and 1. Digitisation of verified
authentication of beneficiary data.
PFMS: 2. Maintenance of real-time
beneficiaries
Verification of MIS portal
bank account and
processing of
Bank: UIDAI:
payments
Making payment to 1. Ensure Aadhaar enrolment.
beneficiary 2. Biometric authentication.

The status in respect of the sampled schemes were as below:

(i) National Social Assistance Programme and State Innovative Scheme
The GoI introduced (August 1995) the National Social Assistance Programme
(NSAP) as a fully funded Centrally Sponsored Scheme. The programme aimed to
provide a basic level of financial support to persons having little or no regular means
of subsistence from his/ her own source of income or through financial support from
family members or other sources. Ministry of Rural Development (MoRD), GoI is the
Nodal Ministry for implementation of NSAP. From 2002-03, NSAP was transferred
to the State Plan and funds were released as Additional Central Assistance (ACA) to
the State. The components of NSAP were (i) Indira Gandhi National Old Age Pension
Scheme (IGNOAPS), (ii) Indira Gandhi National Widow Pension Scheme
(IGNWPS), (iii) Indira Gandhi National Disability Pension Scheme (IGNDPS), (iv)
National Family Benefit Scheme (NFBS) and (v) Annapurna Scheme.

70
 Chapter VI: General Sector

In addition, the Sikkim Government introduced its own State Innovative Scheme
(SIS) covering two pension schemes viz Unmarried Women Pension Schemes
(UWPS) and Subsistence Allowance for Disabled Persons from its own resources to
render assistance to left out beneficiaries falling under Below Poverty Line (BPL) but
not fulfilling eligibility criteria for NSAP of GoI.
The eligibility criteria for availing benefits under IGNOAPS, IGNWPS,IGNDPS and
UWPS is given below.
IGNOAPS: Persons above the age of 60 and belonging to a BPL category with
no regular source of income.
IGNWPS: Differently abled persons in the age group of 18 to 64 years,
belonging to a BPL category with severe or multiple disability.
IGNDPS: Widow in the age group of 40 to 64 years belonging to a BPL
category.
UWPS: Any poor and needy woman who is unmarried and who has attained the
age of 45 and can produce unmarried certificate
The monthly rate of pension under various schemes of NSAP and monthly rate of
pension under UWPS per beneficiary during the period covered by audit is given
below:
Table-6.3.1: Rate of Monthly Benefits
(Amount in ₹)
SI Name of Age Rate upto 30.06.2017 Rate from 1.07.2017 Rate from 1.04.2020
No Scheme GoI State Total GoI State Total GoI State Total
1 IGNOAPS 60-69 200 400 600 200 800 1000 200 1300 1500
70-79 200 800 1000 200 1300 1500 200 1800 2000
80+ 500 500 1000 500 1500 2000 500 2000 2500
2 IGNDPS 18+ 300 400 700 300 1200 1500 300 1700 2000
3 IGNWPS 40+ 300 400 700 300 1200 1500 300 1700 2000
4 UWPS 45+ NA 500 500 NA 2000 2000 NA 2000 2000
(Source: Departmental notifications)
The share of State Government in monthly benefits in all three NSAP schemes was
substantially more than the share of GoI, which ranged between 5.67 times (₹ 1700
GoS and ₹ 300 GoI) to nine times (₹ 1800 GoS and ₹ 200 GoI ) of share of GoI. The
State Government had also raised its shares twice during the period coved by audit.
(ii) Mahatma Gandhi National Rural Employment Guarantee Scheme
In Sikkim, Mahatma Gandhi National Rural Employment Guarantee Scheme
(MGNREGS) had been implemented in 32 blocks. DBT of wages under MGNREGA
was implemented with one block in 2014-15 and by 2018-19 all the 32 blocks were
covered under DBT. MGNREGS’ server viz., NREGASoft of the Ministry of Rural
Development was used for implementation of DBT and PFMS was used for
processing of the payments. NREGASoft, used for implementing MGNREGS was on
boarded to PFMS and linked with National Payments Corporation of India (NPCI).

71
 Audit Report for the year ended 31 March 2020

6.3.2.2 Procedure followed in Sikkim for Selected DBT Schemes

(i) NSAP and SIS
The process of transfer of pension(s) under NSAP and SIS through DBT to the
beneficiaries under the four71 Schemesis shown in the flow charts below:

Direct credited into

Beneficiaries’ account
Fund receipt having account with
from Deposited Nationalised
Government of into Axis Bank/Commercial
India Bank Bank
(sponsoring
Bank)

Fund
withdrawal
from State
Treasury

Fund receipt Bulk fund transferred to

from SBS for crediting
Government of Beneficiaries’ account
Sikkim having accounts with
Bulk fund transferred SBS
to Post Office for
crediting Beneficiaries’
account having accounts
with Post Office

Thus, NSAP and SIS was not implemented through a full-fledged DBT mechanism as
the scheme was not yet on boarded onto the PFMS platform as detailed at Paragraph
No.6.3.8.3(A)(i).
(ii) MGNREGA
Under MGNREGA, as per the National e-FMS (Ne-FMS) for direct release of wages,
an electronic Fund Management System (e-FMS) has been introduced in
MGNREGA. Under this system, funds are held in one account at the State level
(e-FMS Debit account) which is electronically linked to all implementing levels. The
implementing agency (Gram Panchayat/ Block), after due verification of the work and
the muster rolls, generated electronic Fund Transfer Orders (FTOs) to transfer the

71
(i) Indira Gandhi National Old Age Pension Scheme (IGNOAPS), (ii) Indira Gandhi National
Widow Pension Scheme (IGNWPS), (iii) Indira Gandhi National Disability Pension Scheme
(IGNDPS) and (iv) Unmarried Women Pension Scheme (UWPS) under State Innovative Scheme
(SIS)

72
 Chapter VI: General Sector

wages to the beneficiary accounts duly debiting the State level account through the
PFMS platform.
The process of transfer of wages under DBT to the workers under MGNREGA is
shown in the flow charts below:

Fund receipt
from
Government Ne-FMS Sponsoring Bank
of India system Bank account
credited into account of of
Accredited the State worker
Bank of GoI Government
Fund receipt
from State
Government

6.3.3 Organisational structure

NSAP and SIS
The Social Welfare Division under Social Justice & Welfare Department (SJWD) is
responsible for implementation of NSAP and SIS in the State of Sikkim. The SJWD
is headed by the Secretary who is assisted by Director (Social Welfare Division),
Deputy Director and Assistant Director (IT) at Secretariat and Welfare Officer and
Welfare Inspector at district level.
MGNREGA
In Sikkim, the Principal Secretary, Rural Development Department (RDD) who is
assisted by Project Director, is responsible for implementation of MGNREGA,
through MGNREGA Cell. At field level, the Additional District Collector/Block
Development Officer at District/Block level respectively implement MGNREGA.
6.3.4 Scope of Audit
In Sikkim, DBT mode for transferring benefits was being used in59
Schemes/Programmes being implemented by ten departments of the State
Government. For the PA on DBT, five schemes72 namely, (i) IGNOAPS, (ii)
IGNWPS, (iii) IGNDPS (NSAP),UWPS (SIS) and (v) MGNREGA, being
implemented by two73Departments in the State for the period April 2017 to July 2020
were selected based on the volume of expenditure and the frequency of
payments(shown at Appendix 6.3).
For implementation of NSAP and SIS, the Department had neither used NSAP-PPS
nor developed its own ICT software application, the process and sanction of pension

72
MGNREGA, three schemes under NSAP and one from State Innovative Scheme (SIS).
73
Rural Development Department:MGNREGA and Social Justice & Welfare Department:IGNOAPS,
IGNWPS, IGNDPS and UWPS .

73
Audit Report for the year ended 31 March 2020

was done offline (through files) and the payment done manually (MS Excel) through
sponsoring bank. For MGNREGA, the Department was using centralised
NREGASoft developed by NIC wherein the payment is in PFMS platform controlled
by MoRD, GoI. All the updation and maintenance was done by NIC in consultation
with the MoRD and the State has no role in updation and maintenance of
NREGASoft.
NSAP and SIS
The GoI introduced (August 1995) the National Social Assistance Programme
(NSAP) as a fully funded Centrally Sponsored Scheme. The programme aimed to
provide a basic level of financial support to persons having little or no regular means
of subsistence from his/ her own source of income or through financial support from
family members or other sources. Ministry of Rural Development (MoRD), GoI is the
Nodal Ministry for implementation of NSAP. From 2002-03, NSAP was transferred
to the State Plan and funds were released as Additional Central Assistance (ACA) to
the State. The components of NSAP were (i) Indira Gandhi National Old Age Pension
Scheme (IGNOAPS), (ii) Indira Gandhi National Widow Pension Scheme
(IGNWPS), (iii) Indira Gandhi National Disability Pension Scheme (IGNDPS), (iv)
National Family Benefit Scheme (NFBS) and (v) Annapurna Scheme.
In addition, the Sikkim Government introduced its own State Innovative Scheme
(SIS) covering two pension schemes viz Unmarried Women Pension Schemes
(UWPS) and Subsistence Allowance for Disabled Persons from its own resources to
render assistance to left out beneficiaries falling under Below Poverty Line (BPL) but
not fulfilling eligibility criteria for NSAP of GoI.
Mahatma Gandhi National Rural Employment Guarantee Scheme
The MGNREGS Act notified on September 7, 2005, the mandates the provision of at
least 100 days of guaranteed wage employment in a financial year to every rural
household whose adult members volunteer to do unskilled manual work. Thus,
MGNREGA is a powerful instrument for ensuring inclusive growth in rural India
through its impact on social protection, livelihood security and democratic
empowerment.
This Performance Audit involved scrutiny of records of SJWD, RDD, DESME, SBS,
Post Office and Axis Bank.
6.3.5 Audit objective
The Performance Audit (PA) of Direct Benefit Transfer covering the period from
2017-18 to 2020-21 (upto July 2020) was undertaken to ascertain whether:
Necessary process reengineering was done for implementation of DBT so as to
minimize (i) intermediary level (ii) delay in payments to intended beneficiaries
and (iii) pilferage and duplication; and
The infrastructure, organization and management of DBT was adequate and
effective.

74
 Chapter VI: General Sector

6.3.6 Audit criteria

The audit criteria were derived mainly from the following documents:
GoI’s DBT Standard Operating Procedure, DBT Flyer, DBT in States Protocol
Document, Guidelines for State DBT Cell and General Financial Rules;
Scheme guidelines on NSAP, SIS & MGNREGA; and
Circulars, orders, notification issued by DBT Mission, various Ministries of
Government of India and State Government.

6.3.7 Audit methodology

The PA on DBT of the five schemes namely IGNOAPS, (ii) IGNWPS, (iii) IGNDPS,
(iv) UWPS and (v) MGNREGA, being implemented by two74 Departments covering
the period from 2017-18 to 2020-21 (upto July 2020) commenced with an Entry
Conference on 22 December 2020 with the Rural Development Department and
Social Justice & Welfare Department (Implementing Departments), wherein audit
objectives, audit criteria, scope of audit and audit methodology were explained and
discussed. The PA of the DBT was conducted during December 2020 to July 2021
through test check of records in Implementing Departments (IDs), Directorate of
Economics, Statistics, Monitoring and Evaluation (DESME), State Finance
Department, Axis Bank, State Bank of Sikkim and Post Office.
Audit checked the adequacy of systems put in place for DBT by the IDs to ensure the
correctness of database of beneficiaries, seeding of Aadhaar, de-duplication, removal
of ineligible beneficiaries, re-initiation of failed payments, removal of intermediaries
and timely disbursement of benefits as per GoI’s DBT Standard Operating Procedure
and guidelines of respective schemes. In addition, Audit also examined the formation
of State DBT Cell, DBT Committee, etc. as per guidelines for DBT in States Protocol
Document. The audit findings were discussed in an exit conference on 14 September
2021 with the Heads of the IDs and DESME and the replies of the IDs and DESME
have been incorporated in the report.
Acknowledgement
The office of the Principal Accountant General appreciates and acknowledges the
support and co-operation of the Principal Secretary, Rural Development Department,
Government of Sikkim, Secretary, Social Justice & Welfare Department, Government
of Sikkim, Director General, DESME, Government of Sikkim, State Finance
Department, State Bank of Sikkim (Hqr) Gangtok, Axis Bank Gangtok and Head Post
Office Gangtok in providing necessary records and information for the PA.

74
Rural Development Department and Social Justice & Welfare Department.

75
Audit Report for the year ended 31 March 2020

6.3.8 Audit findings

6.3.8.1 Planning
DBT Schemes
DBT Schemes had been identified by the respective Ministries of the Government of
India (GoI). In Sikkim, the DBT schemes identified by the Ministries and for which
funds had been transferred were implemented by the State Departments. 59 schemes
had been implemented by ten departments in the state of Sikkim.
Identification of beneficiaries
NSAP and SIS: The NSAP guidelines75 stipulate Gram Panchayats/ Municipalities to
be the beneficiary identifying institutions. On identification of the beneficiaries, their
applications are certified by the Gram Panchayats/ Municipalities, Area MLA and
Block Development Officer. The States are required to designate a Verification
Officer or Verification Team to verify the applications. The States are also required to
constitute Special Verification Teams for the purpose of annual verification for
confirmation or deletion.
The number of beneficiaries under NSAP & SIS covered during the period 2017-18 to
2019-20 are as shown in the following table.
Table-6.3.2: Beneficiaries
Name of the Scheme Number of beneficiaries, as on
March 2019 March 2020 February 2021
IGNOAPS 22825 23496 23216
IGNWPS 2143 2398 2461
IGNDPS 795 845 859
UWPS 620 706 711
(Source: Departmental information/record)

It was noticed that the Department had neither constituted Verification Team to verify
the applications nor the Special Verification Teams to verify for confirmation or
deletion. Applications were accepted based on the recommendation of Panchayats/
Municipalities, Area MLA and BDO without being verified by the Verification Team.
In absence of Verification Team and Special Verification Teams, the selection/
verification of beneficiaries was not done in tune with the Scheme guidelines that
resulted in payments of benefits to ineligible beneficiaries as discussed below.
a) The National Social Assistance Programme (NSAP) targets the destitute.
Destitute are defined as any person who has little or no regular means of subsistence
from his / her own source of income or through financial support from family
members or other sources.
Thus, the retired Government servants were ineligible to draw pension under
IGNOAP. There were 23,216 IGNOAP beneficiaries in the State as of February 2021.
Audit compared data of beneficiaries (viz. name, bank account number) of IGNOAP
75
Paragraph No. 3.1.4 of NSAP Guidelines.

76
 Chapter VI: General Sector

with Government Pension payment data and found that 12 government pensioners
were also drawing the benefits of the IGNOAP. Out of these, 11 pensioners belonged
to State Government and one was Central Government pensioner. The ineligible
beneficiaries had drawn benefits amounting to ₹ 6.32 lakh during the period covered
by audit from April 2017 to July 2020.The details are shown at Appendix 6.4.
Audit would like to mention that the above findings are exclusively based on analysis
of bank accounts of beneficiaries. The actual number of ineligible beneficiaries could
be higher as the pension database of State Government and data base of pension
admissible under the scheme did not have common unique field, therefore, the actual
number could not be assessed.
The SJWD admitted (October 2021) the fact on existence of ineligible beneficiaries
on being pointed out by Audit and stated that the issue was raised in the high level
meeting chaired by the Chief Minister and subsequently as many as 422 cases were
detected who were drawing normal State Government pension as well as the NSAP
benefits and the Department had immediately stopped releasing the payments of
NSAP to these beneficiaries. The SJWD further added that it would periodically carry
out the clearing process of ineligible beneficiaries.
The SJWD should also initiate action to recover the payments made to the ineligible
beneficiaries under the terms of ‘undertaking’ (included in application form furnished
by the beneficiary) which stated that in case of suppression of facts, the beneficiary
will refund the pension of NSAP immediately.
b) According to Rule 6 of Sikkim Social Assistance Pension Scheme 2014
regulating the NSAP, in case both the husband and wife are old-aged persons and are
eligible for IGNOAP Scheme, only one member of the family shall be awarded the
pension.
Analysis of IGNOAP beneficiaries’ data viz name, husband’s/father’s name, bank
account number etc. revealed that pensions of more than one beneficiary were being
credited into 48 bank accounts. It was seen that in 41 bank accounts, two members
from each household viz the husband and wife, in three bank accounts, father and son
were drawing pension and in four accounts, double pension was being credited. The
details are given in Appendix 6.5.
The SJWD while accepting the fact stated (October 2021) that it had initiated action
to examine the cases and once final verification report is received, it would take
appropriate action.
c) Similarly, analysis of IGNWPS and UWPS beneficiaries’ data viz. name,
account number and drawal also revealed that pensions of two individuals from two
families each were being credited into same account number as detailed at
Appendix 6.6.
As per guideline of the scheme, Special Verification Team was to be in place for
yearly verification of beneficiaries for confirmation and deletion. No such team had
been formed by the department to verify and confirm the genuineness of beneficiaries

77
Audit Report for the year ended 31 March 2020

resulting in ineligible beneficiaries drawing the benefits and irregular drawals of

benefits of the scheme.
Above irregularities indicate that the SJWD had not verified the information of the
beneficiaries. It could have easily verified such cases from Excel data base, as was
done by the Audit.
The SJWD while accepting the fact stated (October 2021) that it had immediately
stopped the payment and added that the verification of detailed payment released to
these beneficiaries is under process. The Department assured to take necessary steps
to recover the excess amount drawn by them if reported. The SJWD also stated that it
would certainly devise a system to review the database of NSAP pensioners to detect
ineligible beneficiaries.
Recommendations:
• The Department may create a proper database of the eligible beneficiaries and
the information furnished by the beneficiaries may be verified by the
verification team periodically with special emphasis on cases related to old age
pension.
• A system of obtaining NOC from the Pension, Group Insurance and Provident
Fund (PGIPF) Division of Finance Department GoS should be made
mandatory for availing benefit under NSAP.
• The Department may fix responsibility of the authorities concerned in a time
bound manner and should stop such payments of pension to ineligible
beneficiaries.
• The Departmentshould take necessary action to recover the payments made to
the ineligible beneficiaries as per the terms of ‘undertaking’ included in
application form submitted by the beneficiaries.
MGNREGA
As per the Mahatma Gandhi National Rural Employment Guarantee Scheme
(MGNREGA), 2005, every adult member of a household in areas shall be entitled to
not less than hundred days of work.
The MoRD (MGNREGA Division) GoI directed (November 2015) all the States and
UTs to implement DBT by December 2016.The State Government was using the
NREGASoFT, software developed by the NIC for management of MGNREGS, and
the payment of wages to the workers was being done in DBT mode facilitated by this
software.
As on February 2021, against the total number of 1,39,705 registered workers, the
account of1,13,902 number of registered workers were Aadhar seeded and against the
total number of 97,396 of active workers, the account of 92,633 number of active
workers were Aadhaar seeded.
It was noticed that as against the total 1,39,705 registered workers, 25,803 registered
workers’ (18.47 per cent) accounts were without Aadhaar seeding. Similarly, out of

78
 Chapter VI: General Sector

97,396 active workers, 4763 active workers (5 per cent) accounts were without
Aadhaar seeding.
The detail analysis and shortcomings on Aadhaar seeding are detailed at Paragraph
No. 6.3.8.3(B)(i).
6.3.8.2 Financial Management
6.3.8.2(A) NSAP and SIS
The total number of beneficiaries, fund receipt and disbursement on IGNOAPS,
IGNWPS, IGNDPS and UWPS during 2017-18 to 2019-20 are given below:
Table-6.3.3: Budget allocation and utilization under NSAP and UWPS
(₹ in crore)
Scheme Budget allocation 2017-18 2018-19 2019-20
and utilization GoI GoS GoI GoS GoI GoS
IGNOAPS Allotment 4.19 25.83 4.48 31.20 6.50 27.00
Expenditure 4.19 25.83 4.82 31.20 6.35 27.00
Saving (-) Excess (+) 0.00 0.00 + 0.34 0.00 -0.15 0.00
IGNWPS Allotment 0.41 2.06 0.36 2.75 0.40 2.50
Expenditure 0.41 2.06 0.36 2.75 0.38 2.50
Saving (-) Excess (+) 0.00 0.00 0.00 0.00 -0.02 0.00
IGNDPS Allotment 0.25 0.87 0.25 1.08 0.25 1.00
Expenditure 0.25 0.87 0.25 1.08 0.15 1.00
Saving (-) Excess (+) 0.00 0.00 0.00 0.00 0.10 0.00
UWPS Allotment NA 0.58 NA 1.12 NA 0.50
Expenditure NA 0.58 NA 1.12 NA 0.50
Saving (-) Excess (+) NA 0.00 NA 0.00 NA 0.00
(ON: Expenditure is inclusive of other allied expenditure to the scheme like printing of forms,
advertisement, hiring charge of vehicles etc.)
(Source: Detailed Appropriation Account and Departmental information/record)
Further, audit analysis revealed that the increase in expenditure during 2018-19 was
due to payment of arrears of 2017-18. Further, decrease in expenditure during
2019-20 was due to short release of pension in 2019-20. The arrears pertaining to the
year 2019-20 including the pension for first quarter were released in April 2020.
6.3.8.2(B) MGNREGA
Fund receipt and expenditure under MGNREGA during 2017-18 to 2020-21 are given
below:
Table-6.3.4: Receipt and expenditure
(₹in crore)
Year OB Receipt Interest from Total receipt Expenditure CB
bank
GoI State

2017-18 2.48 105.71 10.00 0.85 119.04 115.49 3.55

2018-19 3.55 95.80 9.00 0.42 108.77 102.39 6.38

2019-20 6.38 84.13 6.21 0.13 96.85 90.80 6.05

2020-21 6.05 111.48 6.00 0.13 123.66 113.26 10.40

(Source: Annual Accounts)

79
Audit Report for the year ended 31 March 2020

6.3.8.3 Implementation of DBT Schemes

6.3.8.3(A) NSAP and SIS
Audit findings related to the operation of DBT mechanism under various pension
schemes are discussed in the following paragraphs.
6.3.8.3(A)(i) Non-adoption/ development of IT system for DBT
The NSAP guideline (Para 5.1.1) highlights the requirement for efficient service
delivery which would entail time bound sanction, release and disbursement of
pensions within a specified and published time frame. The Ministry developed a
portal (NSAP-PPS) through NIC, which is transaction/ work-flow based system. The
portal acts as a single platform for MoRD, other Administrative authorities involved
in implementation of NSAP in the selection of beneficiaries, disbursement of benefits
to the eligible beneficiaries through Public Sector Banks, Post Offices etc., monitoring
of the implementation status at various stages in different States across the Country.
The SJWD neither utilised the MoRD’s portal i.e. NSAP-PPS nor developed its own
Information and Communication Technology tool for disbursement of benefits of the
schemes through DBT mode.
It was noticed that the approval of beneficiaries as well as the sanctions of payment
were obtained offline. After approval and sanction, the government cheques were
deposited with Axis bank (sponsoring bank) for credit into Departmental scheme
account. Thereafter the Axis bank released payment direct into beneficiaries account
(beneficiaries holding account with nationalized/commercial banks), in respect of
beneficiaries holding account with State Bank of Sikkim (SBS) and Post Office, the
Axis bank transferred the fund to SBS and Post Office for further payment to these
beneficiaries. The database relating to details of beneficiaries, payments under these
schemes were maintained in MS Excel and were processed manually. Thus, the
processing, storing and sharing of data in MS Excel was prone to various
vulnerabilities viz unauthorized editing, viewing etc. In addition, manual transfer of
funds through multiple intermediaries caused considerable delay in payment reaching
the beneficiaries. The SJWD did not have any system to weed out the duplicate and
ineligible beneficiaries. Had the Department adopted NSAP-PPS, all these system and
controls could have been with the Department on real time basis.
Due to non-adoption of NSAP-PPS and non-development of its own IT software for
DBT by the Department, the SJWD deprived itself of an effective Management
Information System (MIS) to monitor the actual payments to the beneficiaries. This
led to existence of intermediaries (Paragraph No 6.3.8.3(A)(iii), ineligible
beneficiaries (Paragraph No 6.3.8.1 (C),delays in payment of pensions (Paragraph
No6.3.8.3(A)(iv)) and non-re-initiation of failed transactions(Paragraph No 6.3.8.3
(A)(v)).
The SJWD stated (October 2021) that the observation of Audit on adoption of NSAP-
PPS of the GoI or other system for smooth implementation of the DBT schemes had
been noted and accordingly it had initiated its action plans for developing a software

80
 Chapter VI: General Sector

application from its own resources with the help of the Information Technology
Department, GoS. The preliminary phase in terms of design had been completed. As
per the mandate and guidelines of GoI the software application will have an end to
end digitization and hosted through the State portal. The department had also
informed the Lead bank to take necessary action for the same.
Recommendation: The Department should ensure its application software is
compatible/ in sync with porting of information / data onto NSAP-PPS through a
bridge-software.
6.3.8.3(A)(ii) Aadhaar number not seeded to beneficiary accounts
Direct Benefit Transfer (DBT) enables the departments and institutions to deliver
cash benefits on-line to beneficiaries’ account in a timely and effective manner. As
per DBT guideline issued by the GoI, the SJWD was required to collect the Aadhaar
details of beneficiaries and seed them in the beneficiary database. Integrity of data
captured and veracity of bank accounts/ IFSC codes, Aadhaar etc. were required to be
ensured by the Department. Further, the guideline on NSAP (Para 5.2.12) also
emphasised on Aadhaar based platform for pension disbursement which would
enhance efficiency in the sanction, payment and disbursement process.
The total number of beneficiaries and the beneficiaries whose accounts were not
seeded with Aadhaar as on February 2021 are shown in the following table:
Table-6.3.5: Seeding of Aadhar number in Beneficiaries accounts
Name Name of the Scheme
of the IGNOAPS76 IGNWPS77 IGNDPS78 UWPS79
District Total Accounts Total Accounts not Total Accounts Total Accounts
benefici- not benefici- seeded with beneficia- not benefici- not
aries seeded aries Aadhaar ries seeded aries seeded
with with with
Aadhaar Aadhaar Aadhaar
East 8,625 515 1,048 147 281 51 303 23
North 1,494 158 181 29 53 9 50 3
South 6,131 153 515 9 269 19 156 3
West 6,966 187 717 14 256 26 202 2
Total 23,216 1,013 2,461 199 859 105 711 31
(Source: Departmental information)
It was noticed that the total number of beneficiaries under IGNOAPS, IGNWPS,
IGNDPS and UWPS was 27,247 against which accounts of 1,348beneficiaries
constituting five per cent of total beneficiaries were not Aadhaar seeded. Analysis
revealed that maximum number of beneficiaries’ accounts (1,013) under IGNOAPS
were not Aadhaar seeded. Analysis also revealed that the East District, despite being
the capital district, lagged in Aadhaar seeding in comparison to other districts.
Non-seeding of Aadhaar was not only against standing guidelines but also led to
inclusion of ineligible and duplicate beneficiaries.

76
Indira Gandhi National Old Age Pension Scheme
77
Indira Gandhi National Widow Pension Scheme
78
Indira Gandhi National Disability Pension
79
Unmarried Women Pension Scheme

81
Audit Report for the year ended 31 March 2020

The Secretary/SJWD during Exit Conference (14 September 2021) stated that one of
the major reasons for not achieving the Aadhaar seeding in full, was also due to the
beneficiaries being above the age of 80 years, disabled beneficiaries, sick
beneficiaries not being able to attend Aadhar Centre. He added that a meeting was
conducted with Finance Department wherein it was decided to form a team that would
enable Aadhaar seeding at doorsteps of such beneficiaries.
Recommendations:
• The Government/ Department may take necessary steps so as to Aadhaar
seeding of beneficiaries may be completed without any further delay.
• Aadhaar seeding of beneficiaries above the age of 80 years, disabled
beneficiaries, sick beneficiaries may be conducted at their doorstep.

6.3.8.3(A)(iii) Existence of intermediaries

The NSAP guideline (Para 5.1.1) specifies the requirement for efficient service
delivery which would entail time bound sanction, release and disbursement of
pensions within a specified and published time frame. In order to enhance efficiency
in implementing NSAP both for sanction and disbursement of pensions and to
eliminate multilayered fund flow management that leads to delays, parking of
unutilized funds and prevents timely accounting and recovery of unutilized funds, use
of IT has been encouraged.
Audit observed that the pension bills for all the four schemes (IGNOAPS, IGNWPS,
IGNDPS and UWPS) on being sanctioned by the department and being passed by the
treasury, the Government cheques were forwarded to Axis Bank (sponsoring bank)
upto March 2020. The sponsoring bank then sent this Government cheque for
collection and subsequently, credited in relevant scheme accounts maintained by the
sponsoring bank. Thereafter, in respect of beneficiaries having accounts with
nationalized/ private banks, the Axis Bank directly credited the pension into the
beneficiaries’ bank accounts through NEFT mode. However, for beneficiaries having
account with State Bank of Sikkim (SBS) and Post Office, the Axis Bank transferred
the bulk amount to SBS, Head Office, Gangtok and Head Post Office, Gangtok. The
SBS, Head Office, Gangtok transferred the funds to their respective branches for
payment of pension till 27 June 2018 and after this date SBS, Head Office, Gangtok
directly credited the amount to beneficiary accounts. The Head Post Office, Gangtok
first credited the pension of all above schemes into one single Government account
(Finacle) from where the pensions pertaining to all the above schemes were credited
into beneficiary accounts by the branch post offices (CBS branches), but for non-CBS
branches, the pension fund were transferred by Head Post Office, Gangtok. The
pension bills/ Government cheques were drawn and paid quarterly till March 2020.
From April 2020 onwards, the SJWD designated SBS as sponsoring bank, in place of
Axis Bank and the Government cheques drawn for pension were credited into account
of SBS, Head Office, Gangtok and Head Post Office, Gangtok. The SBS Head Office,

82
 Chapter VI: General Sector

Gangtok credited the pension through NEFT into beneficiaries’ account. However,
Post Office, Gangtok continued the same process for payment of pension.
The payments of pension were delayed through these multiple intermediaries (Axis
Bank, SBS and Post Office) as detailed in Paragraph No 6.3.8.3 (A)(iv).
The Secretary/SJWD while accepting the audit observations in the Exit Conference
(September 2021)stated that consequent on SBS being made sponsoring bank (April
2020), the level of intermediaries had reduced to certain extent but however added
that the practice of fund transfer still remained in case of post office.
6.3.8.3(A)(iv) Delayed payment of pension
Timely payment of pension was one of the essential aspects of all the four schemes
that provide financial support to the destitute who have little or no regular means of
subsistence from their own source of income. The guidelines on NSAP stipulate that
payment of pension be done on monthly basis and should not be delayed by more than
seven days.
Despite standing instructions to disburse the pension on monthly basis, it was noticed
that pensions were disbursed on quarterly basis upto March 2020. Further, the
quarterly payments were delayed due to existence of various intermediaries and
manual processing of fund transfer, as detailed below:
Pensions paid to beneficiaries by Axis Bank
Since the SJWD did not have a proper IT system for pension disbursement,
consequently it led to delays as shown at table below.
Table No-6.3.6: Delay in credit of pension into beneficiaries account
(in days)
SI. Name of Scheme Delay in credit of fund by Delay in credit of fund by
No. Department to sponsoring bank sponsoring bank into
beneficiaries account

a IGNOAPS 2 to 37 2 to 164

b IGNWPS 2 to 37 2 to 164

c IGNDPS 2 to 25 2 to 162

d UWPS 3 to 22 2 to 179
Source: Bank statement of Axis Bank and Contingent Audit Register
The details of disbursement of pension amounting to ₹108.16 crore on all the above
four schemes from the year 2017-18 to 2019-20 is shown below (Appendix 6.7).

Pensions paid to beneficiaries by SBS, Post Office and others

Apart from the pension disbursed through Axis Bank, funds were also transferred by
Axis Bank to SBS, Post Office and others for disbursement to the beneficiaries. The
details of fund transferred during 2017-18 to 2019-20 is shown below:

83
Audit Report for the year ended 31 March 2020

Table -6.3.7: Funds transferred by Axis Bank to SBS, Post Office and Others
(Amount in ₹)
Name of the Year State Bank of Post Office State Bank Sachiva, South and
Scheme Sikkim of India West District
2017-18 66,49,400 41,61,800 22,69,200 0
IGNOAPS 2018-19 1,63,72,600 1,18,96,000 0 0
2019-20 1,68,09,500 57,17,500 0 0
2017-18 3,95,400 99,000 0 0
IGNWPS 2018-19 10,80,000 5,56,500 0 0
2019-20 10,21,500 2,83,500 3,33,000 0
2017-18 2,60,600 1,45,200 0 0
IGNDPS 2018-19 7,30,500 5,23,500 0 0
2019-20 7,47,000 3,52,500 0 0
2017-18 1,41,500 35,500 0 5,02,293
UWPS 2018-19 5,52,000 2,51,800 0 0
2019-20 2,52,000 22,000 0 0
Total 4,50,12,000 2,40,44,800 26,02,200 5,02,293
(Source: Bank statement)
Above table shows that a fund of ₹ 4.50 crore was transferred to SBS, ₹ 2.40 crore to
Post Office, ₹ 26.02 lakh to SBI, and ₹ 5.02 lakh to Sachiva80, Zilla Panchayat South
and West District, in respect all these schemes during 2017-18 to 2019-20.
a) Disbursements made by SBS – Fund pertaining to all the above schemes were first
credited into one current account of SBS:112010200003278 operated with Axis Bank,
thereafter the fund were transferred to branches and beneficiaries by contra credit and
debit through various SBS General Ledger Account81 pulling the fund from current
account of SBS82.
It was noticed that the SBS had not maintained the scheme-wise account, instead
funds of all the schemes were held in the single SBS current account, therefore, it was
not possible to analyse the scheme-wise inflow and outflows. The SBS had
transferred the bulk amount to its branches for disbursement of pensions till 27 June
2018 and thereafter SBS, Head Office, Gangtok directly credited the amount to
beneficiary account.
Audit test checked the payments of pensions made by five83 branches of SBS revealed
that the SBS Hqr took two to eight days to transfer funds toits branches and branches
also took one day to 14 days to credit the pension into the beneficiaries’ account.
Thus, the beneficiaries received the pension after three to 18 days from the date it was
released from sponsoring bank (Axis Bank) as shown at Appendix 6.8.
Analysis also revealed that amongst these five branches, beneficiaries from Ranipool
branch persistently received pension belatedly ranging from 13 to 17 days as

80
for disbursement of UWPS in cash
81
Account Number:2811100172400000, 2811100133600000, 2811100141700000,
2811100410000000 (Govt Suspense Account) and 281110013020000(Suspense Account)
82
Account Number: 112010200003278.
83
Ranipool, Rangpo, Pakyong, Sang and Deorali branch

84
 Chapter VI: General Sector

compared to other branches. The beneficiaries from Pakyong branch belatedly

received pension of April and May 2018 with delay of 18 days.
b) Disbursements made by the Post Office–The Head Post Office, Gangtok credited
the pension of all above schemes into one single Government account (Finacle) thus
the scheme-wise inflow, out flow and balance lying in this account could not be
ascertained. The pensions pertaining to all the above schemes were credited into
beneficiary account in case of CBS branches, but for non-CBS branches, the pensions
were transferred by Head Post Office, Gangtok to its branch Post Offices.
Analysis of pension payments released to its branches during 2019-20 and 2020-21
(upto July 2020) revealed that Head Post Office, Gangtok took six to 79 days from
receipt of cheque to encashment of cheque as shown below:
Table-6.3.8: Release of funds by Head Post Office to its branches
Period of Pension amount Dates of: Delay
pension (₹ in lakh) Receipt of Encashment of Disbursement to (in days)
cheque cheque branches
4/2019 to 14.37 1.10.2019 10.10.2019 21.10.2019 20
9/2019
10/2019 59.90 23.3.2020 31.3.2020 11.5.2020 50
to 2/2020
4/2020 to 52.11 4.6.2020 10.6.2020 23.9.2020 111
5/2020
6/2020 17.11 16.7.2020 26.8.2020 17.10.2020 93
7/2020 17.12 17.8.2020 4.11.2020 2.12.2020 107
(Source: Post Office statement)
Further, audit analysis of disbursement of IGNOAP and IGNWP pension in three Post
Offices84 during 2019-20 and 2020-21 revealed the following.
• Gangtok Post Office – The Gangtok Post Office had disbursed the pension of 25
beneficiaries (IGNOAP) and four beneficiaries (IGNWP) only once in four
monthsperiod during 2019-20 to the beneficiaries.
• Tadong Post Office: - Tadong Post Office had disbursed the pension of 18
beneficiaries (total IGNOAP) only once in four months period during 2019-20
and 2020-21 to the beneficiaries.
No records on disbursement through its branches for the period 2017-18 to 2018-19
were maintained or produced to Audit by Head Post Offices, Gangtok and Sang.
Further, the records of disbursement made through from Sachiva, Zilla Panchayat
South and West District were not furnished to Audit as well. Thus, the possibility that
there were further delays in disbursement of pensions by the branches to the
beneficiaries, cannot be ruled out based on the audit observations above.
c) Quarterly Disbursement-The scheme guidelines envisage payment of pension
on monthly basis. However, it was noticed that pensions were disbursed on quarterly
basis upto March 2020. Moreover, there were further delays in payment of benefits
due to involvement of multiple intermediaries. Secondly, the SJWD had not

84
Gangtok, Tadong and Sang.

85
Audit Report for the year ended 31 March 2020

established any mechanism for monitoring the disbursement of pensions to the

beneficiaries by various agencies. Delay in pension payment defeated the objective of
providing timely pension to the destitute beneficiaries for their daily sustenance.
The Secretary, SJWD in exit conference accepted (September 2021) the delay in
payment of pension and stated that from April 2020 onwards, the pension was paid
monthly and the Department was in touch with SBS for timely disbursement of
pension. He also added that the proposal has been moved to Government for releasing
the resource of NSAP and SIS on monthly basis like that of salary to ensure timely
disbursement of benefits.
Recommendation: The Department should set up a monitoring system to ensure the
timely payment of pensions to the bona-fide beneficiaries.

6.3.8.3(A)(v) Failed transactions not reinitiated for payment

As per DBT guideline issued by the GoI, in case of failed transactions, the
Department after carrying out the required modification/rectification was required to
send the rectified files for payment again.
a) Failed transaction of Axis Bank (sponsoring bank):
It was noticed that despite standing instruction as per DBT guideline to re-initiate the
failed transactions promptly, an amount of ₹ 1.86 crore pertaining to the period
2017-18 to 2019-20 did not reach 3,524 beneficiaries of these four selected schemes
as the department had failed to re initiate these failed transactions.
As on February 2021, against the total disbursement of ₹ 107.74 crore during 2017-18 to
2019-20, 3,92985 transactions involving ₹ 2.1786 crore (2 per cent) failed as shown below.
Table-6.3.9: Failed Transactions
(Amount in ₹)
Name of the Year Total cases/number of Amount involved in Total pension
Scheme failed transaction failed transaction disbursed
2017-18 692 24,33,400 25,23,52,300
IGNOAPS 2018-19 870 34,74,800 35,63,92,000
2019-20 1456 1,02,68,900 31,54,19,000
TOTAL 3,018 161,77,100 92,41,63,300
IGNWPS 2017-18 39 88,200 1,90,67,700
2018-19 76 2,88,000 3,18,13,600
2019-20 153 7,96,500 3,75,24,000
TOTAL 268 11,72,700 8,84,05,300
IGNDPS 2017-18 7 18,800 88,92,200
2018-19 20 2,18,300 1,43,55,700
2019-20 52 3,39,000 1,61,48,400
TOTAL 79 5,76,100 3,93,96,300
UWPS 2017-18 17 75500 5823300
2018-19 83 321000 12812500
2019-20 59 334000 6799000
TOTAL 159 7,30,500 2,54,34,800
Grand Total 3524 1,86,56,400 107,73,99,700
(Source: Bank statement of Axis Bank)

85
3524 + 405 (failed transaction of 2019-20 reverted back in 2020-21) =3929 transactions
86
₹ 1,86,56,400 + ₹ 30,47,500 (failed transaction of 2019-20 reverted back in 2020-21)
=₹ 2,17,03,900

86
 Chapter VI: General Sector

Analysis revealed that the trend of failed payment persistently increased each year
barring UWPS in 2019-20. The Department had not maintained data/information on
rectifications carried out and re-payment made, reconciliation done with the bank.
The persistent increase in the closing balance87 of IGNOAPS year after year was also
indicative of the fact that failed transactions had not been not re-initiated. Thus, non-
reinitiation of 3,929 failed transactions involving ₹ 2.17 crore indicated that this
amount was not paid to the destitute beneficiaries and they were deprived of their
legitimate pensions.
b) Failed transactions of SBS
Analysis of five88 branches of SBS on payment of pensions revealed that there were
no failed transaction. With regard to DBT to beneficiaries done by SBS, Head Office,
Gangtok from 27 June 2018 to March 2020, no scheme-wise account was maintained.
Thus, Audit could not analyse the failed transactions. Further, no records of
reconciliation done between the branches and Head Office were produced to Audit.
c) Failed transactions during 2020-21
Further from the year 2020-21, the SJWD made SBS the Sponsoring Bank in place of
Axis Bank and opened a new separate saving account (2811100148000005) on 27
April 2020 (SBS account) from where funds were transferred to dedicated scheme
accounts maintained by the SBS and directly credited to beneficiaries accounts.
Scrutiny of records of SBS from 2020-21 (July 2020)in respect of four schemes
revealed there was 63689number of failed transactions in IGNOAPS, 6290 number in
IGNWPS, 2191number in IGNDPS and 3392number in UWPS, totaling to ₹ 19.90
lakh.
d) Failed transaction from Post Office
As stated earlier, the Head Post Office, Gangtok had not maintained the records of
disbursement of pension through its branches for the period 2017-18 to 2018-19.
However, Audit analysed details of disbursement of IGNOAP and IGNWP made by
three Post Offices93. It revealed that eight number of IGNOAP and one IGNWP
beneficiary transactions failed in Gangtok Post Office, similarly, for eight
beneficiaries of IGNOAP the transactions failed in Tadong Post Office and for one
beneficiary of IGNOAP, the transaction failed in Sang Post Office. The reason for
these failed transactions was attributed to beneficiary holding old account number
which was not in system. Neither the Post Office nor the SJWD had rectified the error
and reinitiated the payment.

87
IGNOAPS –C/B as on 31 March 2018:₹ 7.25 crore, as on 31 March 2020:₹ 13.09 crore as per
Axis Bank account.
88
Ranipool, Rangpo, Pakyong, Sang and Deorali branch
89
₹ 1139500
90
₹ 333000
91
₹ 71000
92
₹ 446000
93
Gangtok, Tadong and Sang

87
Audit Report for the year ended 31 March 2020

Although the SBS (sponsoring bank) had intimated the SJWD through mail time to
time on the failed transactions, but the SJWD had not initiated action to rectify errors.
Further examination of the bank statement disclosed that the failed transaction had not
been re-initiated as no debits were made for re-payments. The SJWD could not
produce the records relating to status/data on disbursement (successful transaction,
failed transaction, etc.) sought from the disbursing agencies nor there was any
standing order which directed the disbursing agencies to report status of disbursement
to the department.
The SJWD did not have a system for monitoring the payment of pensions to the
beneficiaries as a result it failed to ensure that the beneficiaries were getting their due
benefits. The Department had not reconciled the status of payments to beneficiaries
and the fund position lying with the Post Office.
Non-payment of pension was against objective of NSAP which envisaged basic level
of financial support to the destitute.
The Secretary/SJWD stated(14 September 2021) in Exit Conference that the main
reason for failed transaction was due to amalgamation of various banks and the
change of IFSC code and even account numbers in some cases were not known to
beneficiaries. Further, he added that lot of beneficiaries have No Frill Account which
stipulates maximum credit of ₹ 50,000 thereby at times credit of pension is denied on
crossing the limit.
The Secretary/SJWD later on stated (October 2021) that the department has appointed
guardian officer for each GPU to ascertain the status of failed transactions and added
that the department would reinitiate all the failed transactions once the details are
framed.
Recommendation:
• The Department should set up system to obtain the data/ information of failed
transactions from the respective agencies at predetermined intervals and take
immediate steps to re-initiate the payments so that the beneficiaries are not
deprived of their legitimate dues.
• The Government may specify time frame for rectification/ ratification for the
cases relates to failed transactions.
6.3.8.3(A)(vi) Balances lying with Axis Bank
An amount of ₹ 13.38crore pertaining to the four schemes was lying with the Axis
Bank (erstwhile sponsoring bank)as on 31 March 2020when the SBS was made
Sponsoring Bank in place of Axis Bank. The SJWD had withdrawn an amount of
₹ 9.66 crore (upto July 2020) out of ₹ 13.38crore. The balance lying with Axis Bank
including interest and NEFT reversals, was ₹ 4.07 crore94 as on 31 July 2020 as
shown below.

94
It includes failed transactions involving ₹ 2.17 crore as mentioned in Paragraph No.
6.3.8.3(A)(v).

88
 Chapter VI: General Sector

Table-6.3.10: Balance with Axis Bank as on 30 July 2020

(₹ in lakh)
SI No Scheme O/B as on 1 Interest NEFT Withdrawn C/B as on 31
April 2020 added Reversal July 2020
1 IGNOAPS 1309.27 3.45 31.02 966.10 377.64
2 IGNWPS 7.04 0.10 0 0 7.14
3 IGNDPS 15.10 0.12 0 0 15.22
4 UWPS 6.73 0.05 0 0 6.78
Total 1338.14 3.72 31.02 966.1 406.78
(Source: Bank statement)
This balance of ₹ 4.07 crore which was primarily meant for the pension disbursements
to destitutes, indicated that the beneficiaries of these schemes were denied their
legitimate dues. The reasons for not withdrawing as well as non-disbursement of this
amount were not intimated to audit.
The SJWD stated (October 2021) that the department would be disbursing this
balance fund lying with Axis bank towards all the old failed transactions on receipt of
details from the guardian officer from each GPU.
Recommendation: The Department should withdraw the balance amount lying with
Axis Bank and disburse the pending failed transaction amount.

6.3.8.3(B) Mahatma Gandhi National Rural Employment Guarantee Act

The MGNREGS Act notified on September 7, 2005, mandates the provision of at
least 100 days of guaranteed wage employment in a financial year to every rural
household whose adult members volunteer to do unskilled manual work. Thus,
MGNREGA is a powerful instrument for ensuring inclusive growth in rural India
through its impact on social protection, livelihood security and democratic
empowerment.
6.3.8.3(B)(i) Non-seeding of Aadhaar
The guidelines on the DBT envisage that the scheme implementing departments
should ensure that all the accounts are Aadhaar seeded. The RDD was required to
collect the Aadhaar details of beneficiaries and seed them in the database. The data of
registered and active workers vis-à-vis such workers whose accounts were seeded
with Aadhar as on February 2021 is shown in the following table:
Table-6.3.11: Number of workers as on February 2021:
No of workers Aadhaar seeded workers
Registered Active Out of registered Out of active
1,39,705 97,396 1,13,902 92,633
(Source :NREGASoFT)

It was noticed that 25,803 registered workers’ accounts, 18 per cent of the total, were
without Aadhaar seeding. This was high and similarly as against the 97,396 active
registered workers, 4,763 active registered workers’ accounts i.e. five per cent, were
not Aadhaar seeded. Aadhaar seeding of accounts of these workers in the beneficiary
database needs to be done to eliminate duplication and curb leakages.

89
Audit Report for the year ended 31 March 2020

The district-wise status of registered workers and workers whose accounts were
seeded with Aadhaar (February 2021) is shown in the following table:
Table-6.3.12: Status of seeding of Aadhaar
Districts Registered Workers Active Workers
Total Accounts Accounts with Total Accounts Accounts with
Number with Aadhaar (Per cent) Number with Aadhaar (Per cent)
Aadhaar Aadhaar
East 34395 28022 81.47 23317 22349 95.85
North 12263 9679 78.93 8432 7897 93.66
South 43639 30499 69.89 26724 24409 91.34
West 49408 45702 92.5 38923 37978 97.57
Total 139705 113902 81.53 97396 92633 95.11
(Source :NREGASoFT
It could be seen from above table that West District had highest number of workers
and at the same time was leader in seeding of Aadhaar. The South District was
lagging in seeding the accounts with Aadhaar of both registered and active workers.
The RDD (MGNREGA) stated (September 2021) that the Department was striving to
complete the seeding of remaining accounts by 30 November 2021 for which the field
functionaries were on job to collect the Aadhaar numbers of the remaining workers
and would be uploaded in the MIS.
Recommendation: Accounts of all the workers under MGNREGA may be seeded
with Aadhaar on priority and accounts may also be validated before initiation of
transaction.

6.3.8.3(B)(ii) Delay in processing of Fund Transfer Order (FTO) by Signatory I

and alsodelay in approval by Signatory II
Timely payment of wages has emerged as one of the main challenges of MGNREGA
over the last few years. Primary condition to ensure payment of wages within 14 days
after start of work was one of the essences of MGNREGA. The disbursement of wages
to beneficiaries through DBT aimed to reduce the delays in payments. Scrutiny of data
for the year 2017-18 to 2020-21 (upto January 2021) on processing and approval of
Fund Transfer Orders (FTO) for the payment of wages revealed that there were delays
in processing of FTOs as well as approval of FTOs for payment as below:
Table-6.3.13: Delay in processing of FTOs
(Amount in ₹)
Year Districts FTOs delayed by FTOs Not signed by Signatory II &
Signatory I Delayed by
More than 21 Days 15-21 Days More than 21 Days
FTO Amount FTO Amount FTO Amount
2019-20 EAST 1 201433 0 0 0 0
NORTH 1 8640 0 0 0 0
SOUTH 2 6000 0 0 11 72000
WEST 0 0 0 0 2 209281
2020-21 EAST 0 0 2 383848 8 1420729
NORTH 0 0 1 2780 38 1098152
SOUTH 11 62100 0 0 21 9556008
WEST 1 476105 2 246053 5 783638
Total 16 754278 5 632681 85 13139808
(Source :NREGASoFT)

90
 Chapter VI: General Sector

The RDD (MGNREGA) stated (September 2021) that the delay in signing the FTOs
was primarily because after transfer of signing authority (BDO) it took time for
procurement of DSC dongle for new officer from Kolkatta. However, the Department
added that from 2020-21 dongles are being procured from a local vendor. The
Department further added that the head office is monitoring the status of signing the
FTOs on a weekly basis and alerts were being issued to the program officer whenever
there was delay in signing.
6.3.8.3(B)(iii) Delayed payment of wages
As per MGNREGA guideline, final FTOs have to be uploaded within 15 days and
thereafter two days provided for payment of wages through Ne-FMS system. The
account relating to wage component is handled by the MoRD, GoI and operated
through Ne-FMS system which sends release order of wage payment to Accredited
Bank of GoI. The Accredited Bank in turn credits the amount to Sponsoring Bank of
the State Government. Thereafter, Sponsoring Bank credits the wages into bank
accounts of workers through NPCI and NPCI sends response files to PFMS. PFMS
shares response files with NREGASoft.
However, it was noticed that theMoRD, GoI had not ensured the above stipulation as
it took considerable time to release the payment of wages as shown under:
Table-6.3.14: Delayed payment of wages
(₹ in lakh)
Time taken for payments 2017-18 2018-19 2019-20 2020-21 Total
Payments between TT 221382 232214 235682 256347 945625
0-15 days Amount 4507.70 4608.77 4911.44 5849.37 19877.28
Payment between TT 35566 35790 24003 2445 97804
16-30 days Amount 732.54 690.55 504.96 53.15 1981.20
Payment between TT 25744 19395 6971 546 52656
31-60 days Amount 510.50 369.58 149.67 15.82 1045.57
Payment between TT 9028 8517 2484 16 20045
61-90 days Amount 190.01 172.35 54.48 0.39 417.23
Delayed Payment TT 9839 5002 916 18 15775
more than 90 Days Amount 188.55 83.77 18.20 0.38 290.90
Total delayed TT 80177 68704 34374 3025 186280
payment Amount 1621.62 1316.25 727.30 69.74 3734.91
Total payment for TT 301559 300918 270056 259372 1131905
Financial Year Amount 6129.32 5925.02 5638.74 5919.11 23612.19
(Source :NREGASoFT) TT: Total Transactions

Analysis revealed that though there was downward trend in the delay of payment
from ₹ 16.22 crore in 2017-18 to ₹ 0.70 crore in 2020-21, however it was noticed that
the major portion of delay was occurring in East District, even in 2020-21, against the
total delayed wages amounting of ₹ 69.74 lakh, the East District’s share alone stood at
₹ 41.88 lakh forming 60 per cent of total delay wages of 2020-21 as shown in the
following Table:

91
Audit Report for the year ended 31 March 2020

Table-6.3.15: Delayed payment of wages

(₹in lakh)
Year Payments made beyond 15 days
EAST NORTH SOUTH WEST Total Delayed
Payment
TT Amt TT Amt TT Amt TT Amt TT Amt
2017-18 18887 402.38 16711 389.05 10960 216.09 33619 614.10 80177 1621.62
2018-19 21301 421.83 9460 203.91 17700 314.03 20243 376.48 68704 1316.25
2019-20 15096 325.89 7714 171.46 4876 94.36 6688 135.59 34374 727.30
2020-21 1748 41.88 746 16.04 259 5.98 272 5.84 3025 69.74
Total 57032 1191.98 34631 780.46 33795 630.46 60822 1132.01 186280 3734.91
(Source: NREGASoFT)
Though there was decreasing trend in delays in making payment of wages but the
reasons for major portion of delayed payment occurring from East district could not
be stated to audit.
The RDD (MGNREGA) stated (September 2021) that the department was
continuously coordinating with MoRD, GoI to resolve these issues on time.
Keeping in view, the large number of transactions not processed within due time the
Department may address and resolve this issue timely.
6.3.8.3(B)(iv) Failed transactions not re-initiated for payment on entirety

It was the responsibility of the implementing department to ensure that the payments
of wages are made in timely manner. In case of failed transactions, the department
after carrying out the required modifications/rectifications was required to send the
rectified files to PFMS again. Several rounds of data pushing may be required till data
is 100per cent correct.
It was seen that during 2017-18 to 2020-21 there were in all 15,364 failed transactions
involving ₹ 3.10 crore as shown below:
Table-6.3.16: Failed Transactions
(₹ Amount in)
Year Total Amount of Rejected Amount of Total no. of Amount of
rejected rejected transactions successful re- pending pending
transactions transactions reinitiated initiated transactions transactions
successfully transactions
2017-18 8538 164,58,349 8152 156,79,156 386 779,193
2018-19 3322 66,96,894 3111 62,69,439 211 427,455
2019-20 2192 48,02,541 2032 44,36,205 160 366,336
2020-21 1312 30,83,593 942 22,27,708 370 855,885
Total 15364 310,41,377 14237 286,12,508 1127 24,28,869
(Source: NREGAsoft)
The reasons for failed transactions were attributed to invalid Aadhaar (non-matching
of Aadhaar), dormant account, error in data entry of account number. The RDD
claimed that the failed transactions were reconciled and payment re-initiated within
three days, but it was noticed that out of total 15,364 failed transactions involving
₹ 3.10 crore, 14,237 transactions amounting to ₹ 2.86 crore had been re-initiated
successfully, leaving a balance of 1,127 transactions from 2017-18 onwards involving

92
 Chapter VI: General Sector

an amount of ₹ 24.29 lakh were yet to be rectified and hence remained pending for
payment as of February 2021.
The Joint Secretary (MGNREGA), RDD stated (September 2021) that the process for
regeneration of rejected transaction had already been initiated and as of 10 September
2021, total number of pending cases had come down to 35, with ₹ 0.78 lakh. The
department also stated that the delay in regeneration of FTOs were due to death of
beneficiaries, dormant account, bank merger and non-CBS account etc. The
department further added that timelines had been framed to complete all the
generation of pending rejected transactions by 31 October 2021 for which the head
office was monitoring progress along with analysis report to watch the regeneration.
Recommendation: The RDD should re-initiate all pending transactions on urgent
basis so that the pending wages are paid to the concerned workers without further
delay. Secondly, the RDD should review the pending wages periodically and
disbursement made within prescribed timeframe.

6.3.8.3(B)(v) Non conduct of Social Audit of Schemes under NSAP and

MGNREGA
As per Scheme guidelines, Social Audit is essential in implementation and monitoring
of the schemes under NSAP/MGNREGA. Social Audit not only leads to the
refinement of the schemes but also enhances transparency and accountability and
helps redress grievances in the public. Social Audit can be conducted by the Gram
Sabha/ Ward Committee/NGOs. Social Audit under NSAP should be held at least
once in every six months. The State nodal department should obtain reports of Social
Audit conducted and report the same to the Ministry of Rural Development, GoI.
Similarly, an innovative feature of the MGNREGA is that it has institutionalized
‘Social Audit’ as a means of continuous public vigilance (Mahatma Gandhi NREGA,
Section 17). Social Audit has the following dimensions: i) As a continuous and
ongoing process, involving public vigilance and verification of quantity and quality of
works at different stages of implementation; and ii) A process is to be conducted in
every Gram Panchayat (GP) at least once in six months, involving a mandatory
review of all aspects.
No records of Social Audit conducted in respect of NSAP and SIS schemes during the
period covered by audit i.e. 2017-18 to 2020-21 (upto July 2020) could be produced
to Audit. However, Social Audit in respect of MGNREGA was conducted annually
and follow up action also taken up.
The Secretary/SJWD stated (14 September 2021) in Exit Conference that funding was
an issue, if proper funds were provided to cover the expense of Social Audit, then
Social Audit would be initiated.
The Pr. Secretary/RDD subscribed to the views of Secretary/SJWD and stated that
Social Audit of MGNREGA is conducted once a year which costs one per cent of
Office Expenses, whereas the guidelines stipulate Social Audit twice a year at the cost

93
Audit Report for the year ended 31 March 2020

of 0.5 per cent of Office Expenses. Thus, it was not possible to conduct twice a year
and opined that some appropriate funding is a must for conduct of Social Audit as per
guidelines.
6.3.8.3(C) Impact Analysis (Beneficiary Survey)

Beneficiary survey in terms of timelines, ease of access to the banks/post office and
door stop delivery rendered to the beneficiaries.
Personal interaction with the beneficiaries and structured questionnaire was designed
for the beneficiaries from six sampled block offices to elicit information on the
timelines, ease of access to the banks/post office and door stop delivery rendered to
the beneficiaries. Sample selection was done as under:
Table-6.3.17: Sample of Beneficiary Survey
Total districts District selected Total Blocks Blocks sampled
(50 per cent) (33 per cent)
Four Two (East & South) East: 10, East: 03
South: 08 South: 03

Table-6.3.18: Number of Beneficiary surveyed

District Block sampled Number beneficiaries in Number of Beneficiaries
Block surveyed
Ranka 754 54
East Martam 687 59
Khamdong 783 55
Namthang 1105 131
South Nandu Gaon 501 54
Namchi 1144 53

The structured questionnaire was used to gather evidence. Out of total 406
beneficiaries surveyed, only seven95 beneficiaries had accounts with Post Office while
remaining had accounts with the Banks. The responses were analysed to determine
the extent of satisfaction of beneficiaries.
Beneficiary survey revealed the following:
a. The beneficiaries whose pensions were directly being credited into their bank
accounts, stated that the present system of disbursing the pension directly into their
bank account was better as compared to previous one (cash basis) as they were getting
the pension without delay wherein involvement of Block office and Panchayat were
eliminated. They also stated that they were able to save the expense of vehicle fare for
visiting the Block/ Panchayat offices and also a sense of saving habit was developed
and also added that checking of credit of their pension in their account was possible.
b. On ease of access to the bank/post office, the beneficiaries responded that the
Bank/ Post Office were within their reach or in their own locality and as such there
was no problem in accessing the bank/post office.

95
Nandugaon, South District

94
 Chapter VI: General Sector

c. As regards communication with the bank, the beneficiaries stated that they had
ATM cards and routinely receive SMS.
d. With regard to Post Office account holders, they stated that the Post Office
delivers pension at the doorstep for sick, old and disabled beneficiaries.
6.3.8.4 Monitoring and internal control mechanism

6.3.8.4(A) State DBT Cell

As per DBT guideline issued by the GoI, each State should have a State DBT (SDBT)
Cell headed by an officer not below the rank of Joint Secretary and comprise of
officials handling the identified schemes, officials from Finance Department and IT
experts (NIC). The SDBT Cell would identify DBT schemes or DBT components of
schemes and classify them in the following categories: i) Cash transfer from
Government to Individual Beneficiary ii) Transfer In-kind from Government to
Individual Beneficiary iii) Other Transfers/Processes. The SDBT Cell was required to
study the existing process flow and fund flow under each scheme and reengineer the
same wherever necessary. The SDBT cell would develop an IT based System
Utility/MIS for its schemes that would provide a coherent centralised workflow
engine for field functionaries, officials and beneficiaries and enable report generation,
dynamic update of data and daily tracking of progress. The SDBT Cell was required
to train all stakeholders including officials of States on usage of MIS and prepare a
user manual/guide and organise workshops/seminars.
The SDBT Cell was also required to constitute a dedicated body to deal with
complaints and grievances of beneficiaries in a fair and timely manner.
The Chief Secretary to the GoS, vide Notification No 18 Home 2013 dated 7 February
2013 notified Directorate of Economics, Statistics & Monitoring & Evaluation
(DESME) as Nodal Department to facilitate the implementation of DBT of various
welfare schemes in the State. It was seen that no State DBT Cell had been constituted
in Sikkim, and the Ministries concerned of GoI directly liaisoned with the concerned
departments of State Government.
The perusal of web portal of State DBT Portal revealed that the portal had the list of
the schemes and implementing departments. It did not contain any further
information, so the facility of aggregation and assessing of information in entirety
from State DBT Portal as a one stop point for State was not there and integration of
State DBT Portal with DBT Bharat Portal was also out of question.
The DESME being the Nodal Department stated (January 2021) that they forward the
directives received from GoI to the respective Departments.
The integrated system/MIS for SDBT was yet to be developed, classification of DBT
into cash, kind and others was also not done. No technical support/ IT support and
training was rendered by DESME to stake holder Departments.
It was noticed that the NREGAsoft on MGNREGA data automatically integrated and
ported with DBT Bharat Portal on real time, but data on NSAP did not integrate and

95
Audit Report for the year ended 31 March 2020

port with DBT Bharat Portal as the software for NSAP was neither developed nor
NSAP-PPS was adopted.
No dedicated body to deal with complaints and grievances of beneficiaries had been
formed and also no grievance redressal system was put in place to record complaints
received, action taken and outcome thereof. This led to delays in payment/non-
payment of wages/benefits to the workers/beneficiaries in respect of MGNREGA and
NSAP.
DESME was notified as Nodal Department to facilitate the implementation of DBT of
various welfare schemes in the State of Sikkim. However, no such initiative as Nodal
Department towards SDBT was undertaken by DESME.
DESME stated (October 2021) that DESME has been declared as State DBT Cell.
Recommendation:
DESME being declared as State DBT Cell may perform all function of SDBT as
laid down in GoI DBT guidelines, so that the benefits of the schemes concerned
are ensured as per guidelines of DBT. DESME should also ensure that the DBT
framework is adopted by all the implementing Department.
State DBT Cell (DESME) should be strengthened with required manpower to
operationalise its organisational structure with the assigned responsibilities to
enable the DBT Cell to act as one-stop point or nodal point for smooth on-
boarding of schemes on to DBT platform and to effectively monitor the progress
made by each Implementing Department by setting targets and milestones for
implementation of DBT in a time bound manner.

6.3.8.4(B) State Advisory Board

As per DBT guideline issued by the GoI, State Advisory Board as a parallel body to
the State-level DBT Cell was required to be constituted comprising of representatives
from various enablers and stakeholders of DBT like all the government departments
who run schemes which fall under the purview of DBT, UIDAI, State Level Bankers'
Committee (SLBC), IT Team, NIC, NPCI, Telecom Service Providers (TSPs), etc.
The chief role of this body would be to provide the Cell's executive body, holistic,
well-rounded advisory and consulting inputs. This body may meet once in a quarter or
in any other regular interval, as deemed fit.
However, State Advisory Board had not been constituted in Sikkim. Thus holistic,
well-rounded advisory and consulting inputs as expected from Board was not
provided to DBT implementing Departments. This led to non-adherence of DBT
guidelines in implementation of NSAP as no specific integrated system/MIS was
developed for DBT.
On being pointed out by Audit, the State Government brought out the Notification No
589/P&DD dated 28.09.2021 wherein the State DBT Advisory Board was formed and
also terms of reference of State DBT Advisory Board was laid down.

96
 Chapter VI: General Sector

The DESME stated (October 2021) that the State DBT Advisory Board has been
formed and also terms of reference of State DBT Advisory Board were laid down vide
Notification No. 589/P&DD dated 28 September 2021.
Recommendation: The State DBT Advisory Board may provide advisory and
consulting inputs to DBT implementing Departments.

6.3.8.4(C) DBT Committee

The DBT Committee was to be constituted within each Department to ensure that
DBT framework is adopted in implementation of schemes. It was noticed that DBT
committee was not constituted in RDD as well as in SJWD which were implementing
departments for MGNREGA and NSAP respectively. These implementing
Departments were even not aware of the fact the DBT committee was to be
constituted in Stake holder Department. However, it was seen that DBT framework
was adopted in implementation of MGNREGA but for NSAP, no such DBT
framework was adopted in implementation of scheme. As mentioned in Paragraph no
2.2.8.3(A)(i), the DBT for the components of schemes of NSAP was not adopted in
true spirit of DBT, as a result there were instances of existence of intermediaries,
ineligible beneficiaries, delay in payments to the beneficiaries, non-payment of
benefits due to non re-initiation of failed transactions. The SJWD had neither adopted
the NSAP-PS nor developed any software for DBT in line with scheme guidelines.
Due to non-formation of DBT Committee in the department, these issues remained
unaddressed, consequently the beneficiaries of the scheme suffered unnecessarily.
DESME stated (October 2021) that the DBT Committees were being formed in all the
Departments.
Recommendation: DESME should ensure that the DBT framework is adopted by
all the implementing Departments.

6.3.9 Conclusion
Digitization of database of beneficiaries in respect of National Social Assistance
Programme (NSAP) and State Innovative Scheme (SIS) was not done, Government of
India Portal NSAP-PPS was not used and State’s own ICT system also not developed.
Aadhaar number in respect of NSAP and SIS upto five per cent was not seeded to
bank account and similarly in respect of MGNREGA, 18 per cent of registered
workers bank account were not seeded with Aadhaar. The Department had neither
constituted Verification Team to verify the applications nor the Special Verification
Teams to verify for confirmation or deletion. Applications were accepted based on the
recommendation of Panchayats/ Municipalities, Area MLA and BDO without being
verified by the Verification Team. There were cases of ineligible and duplicate
beneficiaries availing pension in NSAP and SIS. There were also cases of delay in
crediting amount in the bank account of beneficiaries/workers both in case of NSAP
&SIS and MGNREGA. Failed transaction were not reinitiated for payments on
entirety both in case of NSAP& SIS and MGNREGA. There was existence of

97
Audit Report for the year ended 31 March 2020

intermediary in case of NSAP &SIS and Social Audit was not conducted in NSAP.
Further,
Since the benefits are being processed through various intermediaries, applications
are being finalised without being verified by the Verification Team and Social Audit is
not being conducted, these are against the tenet of DBT and the chances of diversion
of fund and eligible beneficiaries getting left out cannot be ruled out.
There was no separate State DBT Cell to study the existing process flow and fund
flow under each scheme and reengineer the same and no IT based System Utility/MIS
developed for its schemes that would provide a coherent centralised workflow engine
for field functionaries, officials and beneficiaries. Further, no measure was taken to
identify DBT components of schemes and classify them in Cash, In-kind and Other
Transfers. There was no DBT Committee to ensure adoption of DBT framework in
implementation of schemes. There was also no dedicated body to deal with complaints
and grievances of beneficiaries to redress delays in receiving amount in the bank
account, non-re-initiation of failed payments etc. Thus, the above shortcomings were
detrimental in achieving the objective of DBT in ensuring timely payments to eligible
beneficiaries and workers in a fair, transparent, efficient and reliable manner.
6.3.10 Recommendations
The Department may create a proper database of the eligible beneficiaries and
the information furnished by the beneficiaries may be verified by the verification
team periodically with special emphasis cases related to old age pension.
A system of obtaining NOC from the Pension, Group Insurance and Provident
Fund (PGIPF) Division of Finance Department GoS should be made mandatory
for availing benefit under NSAP.
The Department may fix responsibility of the authorities concerned in a time
bound manner and should stop such payments of pension to ineligible
beneficiaries.
The Department should take necessary action to recover the payments made to
the ineligible beneficiaries as per the terms of ‘undertaking’ included in
application form submitted by the beneficiaries.
The SJWD should ensure its application software is compatible/in sync with
porting of information / data onto NSAP-PPS through a bridge-software so that
benefits of the schemes are delivered to the beneficiaries on time.
The Government/ Department may take necessary steps so as to Aadhaar seeding
of beneficiaries may be completed without any further delay.
Aadhaar seeding of beneficiaries above the age of 80 years, disabled
beneficiaries, sick beneficiaries may be conducted at their doorstep.
The SJWD should set up system to obtain the data/ information of failed
transactions from the respective agencies at predetermined intervals and take
immediate steps to re-initiate the payments so that the beneficiaries are not
deprived of their legitimate dues.

98
 Chapter VI: General Sector

The Government may specify time frame for rectification/ ratification for the
cases relates to failed transactions.
The RDD should re-initiate all pending transactions on urgent basis so that the
pending wages are paid to the concerned workers without further delay.
Secondly, the RDD should review the pending wages periodically and
disbursement made within prescribed timeframe.
Accounts of all the workers under MGNREGA may be seeded with Aadhaar on
priority and accounts may also be validated before initiation of transaction.
DESME being declared as State DBT Cell may perform all function of SDBT as
laid down in GoI DBT guidelines, so that the benefits of the schemes concerned
are ensured as per guidelines of DBT. DESME should also ensure that the DBT
framework is adopted by all the implementing Department.
State DBT Cell (DESME) should be strengthened with required manpower to
operationalise its organisational structure with the assigned responsibilities to
enable the DBT Cell to act as one-stop point or nodal point for smooth on-
boarding of schemes on to DBT platform and to effectively monitor the progress
made by each Implementing Department by setting targets and milestones for
implementation of DBT in a time bound manner.

COMPLIANCE AUDIT PARAGRAPH

Finance Department
6.4 Loss of Government revenue

Finance Department invested Guarantee Redemption Fund at lower rate of

interest which led to loss of Government revenue of ₹ 31.50 lakh on account of
interest
The Government of Sikkim constituted Guarantee Redemption Fund (GRF) in April
2005, for payment of obligations arising out of the guarantees issued by the
Government in respect of the bonds issued and other borrowings by the Government
undertakings and other bodies, in case the same are revoked. The corpus of the Fund
is invested in fixed deposits based on decision of the State Government.
It was seen that the investment of corpus of GRF for the year 2018-19 made in term
deposits had matured in March 2019. In order to reinvest the corpus of GRF for year
2019-20, the FD called quotations and three banks (IndusInd Bank, SISCO Bank and
State Bank of Sikkim) offered their rates. The FD held negotiations with the banks
(22 March 2019) and found that the interest rate of 8.55 per cent offered by IndusInd
Bank though highest, but had a cap of minimum investment of ₹ 300 crore, second

99
Audit Report for the year ended 31 March 2020

highest rate (8.10 per cent) was offered by SISCO Bank96 (Sikkim State Cooperative
Bank Limited) and the lowest rate (7.50 per cent) was offered by the SBS. Despite the
fact that SISCO Bank had offered interest rate of 8.10 per cent without any cap, the
FD approved (26 March 2019) investment of entire amount of ₹ 52.35 crore in the
SBS at its offered rate of 7.50 per cent per annum. Accordingly, entire amount of
₹ 52.35 crore was invested in different term deposits with the SBS for a period of one
year at the rate of 7.50 per cent per annum with total maturity value of ₹ 56.29 crore
with deposits maturing between 24th March and 28th March 2020.
No reasons were on record to justify as to why the amount was invested at lower rate
of interest in SBS despite offer of higher rate by the SISCO Bank (Sikkim State
Cooperative Bank Limited)
The loss of additional interest due to the injudicious invested at 7.50 percent instead
of the higher 8.10 percent works out to ₹ 31.50 lakh as detailed below:
Table No. 6.4: Loss of additional interest due to the injudicious invested
Particulars Amount in ₹

Amount invested 52,34,93,499

Matured amount with interest 56,28,63,081

Amount of interest earned at the rate of 7.50 per cent 3,93,69,581

Amount of interest at the rate of 8.10 per cent per annum 4,25,19,149
₹ 3,93,69,581x 8.10/7.50

Difference in amount of interest 31,49,567

Source: Departmental Figure
Injudicious investment of the fund at lower rate of interest had resulted in loss of
Government revenue in terms of interest of ₹ 31.50 lakh.
The FD in its reply (August 2020) stated that SBS was the only Treasury Bank of the
State as all the receipts and payment were made from the SBS only. As the SBS was a
non-profit organisation of the State Government, to promote the SBS, it was decided
to invest the fund in the SBS. Further, normally, Sinking Fund and GRF were
established for the purpose to repay the debt/borrowing in case of economic
breakdown in the State and it was easy to make transaction within the SBS and in case
of pre-mature withdrawal or immediate requirement of fund against the fund invested
in other nationalized bank, it may take time to transfer the fund to the SBS in the
designated bank account and credit in the Government Account.

96
SISCO Bank established in 1996 and came into operation from 1999 and is regulated by RBI and
NABARD. It is a federated body and established to raise deposit and share capital for extending
loans to member cooperative societies. It has paid up capital of ₹ 926.60 lakh during 2017-18 and
net profit of ₹ 483.15 lakh--GoI portal

100
 Chapter VI: General Sector

Reply of the FD was not tenable as the SBS was not a non-profit organisation and that
its justification to make investment only with SBS appears to be afterthought, as the
Finance Department has been investing its funds in other nationalized and private
banks in the past. Moreover, with NEFT and FTGS being in operation, the issue of
delay in transfer of funds does not arise.

101
 CHAPTER VII
FOLLOW UP OF AUDIT
OBSERVATIONS
 Chapter VII: Follow-up of Audit Observations

CHAPTER VII
FOLLOW UP OF AUDIT OBSERVATIONS
7.1 Follow up action on earlier Audit Reports
Audit observations on financial irregularities and deficiencies in maintenance of
initial accounts noticed during local audit and not settled on the spot are
communicated to the audited departments and to the higher authorities through
Inspection Reports (IRs).
Serious irregularities noticed in audit are included in the Report of the Comptroller
and Auditor General of India (Audit Reports) and presented to the State Legislature.
According to the instructions issued by the Finance Department, Government of
Sikkim, all the concerned administrative departments were required to furnish
explanatory notes on the paragraphs/Performance Audits included in the Audit
Reports within one month from the date of issue of the Audit Reports.
It was, however, noticed that as of November 2020, in 64 per cent cases (inclusive of
PSU and Revenue Sectors), the concerned administrative departments had not
submitted the explanatory notes on the paragraphs/Performance Audits included in the
Audit Report pertaining to the year 2013-14. In respect of Audit Reports for the years
2014-15, 2015-16, 2016-17, 2017-18 and 2018-19, explanatory notes had not been
submitted by concerned departments in 42, 75, 94, 100 and 100 per cent cases
respectively. The position of suo motu explanatory notes not received as on 30
November 2020 is shown in the table below:
Table 7.1: Explanatory notes not received (as on 30 November 2020)
Year of Audit Date of placement of Total performance audits Number of PAs/ Paragraphs for
Report Audit Report in the (PAs) and Paragraphs in the which explanatory notes were
State Legislature Audit Reports not received
PAs Paragraphs PAs Paragraphs
2013-14 17.03.2015 04 10 04 05
2014-15 28.03.2016 04 15 01 07
2015-16 18.03.2017 04 12 04 08
2016-17 12.07.2018 06 12 06 11
2017-18 02.08.2019 02 14 02 14
2018-19 08.12.2021 01 07 01 07

7.2 Response of the departments to recommendations of the PAC

Finance, Revenue and Expenditure Department (FRED) issued instructions to all
departments to submit Action Taken Notes (ATNs) on suggestions, observations and
recommendations made by Public Accounts Committee (PAC) for their consideration
within 15 days of presentation of the PAC’s Reports to the Legislature. PAC’s
Reports/recommendations are the principal medium by which the Legislature enforces
financial accountability of the Executives to the Legislature and it is appropriate that
they elicit timely response from the departments in the form of ATNs.
PAC had discussed Audit Reports for the year up to 2013-14 and given recommendations
on the Audit Reports for the year up to 2012-13. As of November 2020, ATNs had
been received in respect of 614 out of 61897 recommendations of the PAC, made for
the Audit Reports for the years between 1990-91 and 2011-12.

97
4 (618-614) ATNs relate to Audit Report 2011-12

103
Audit Report for the year ended 31 March 2020

7.3 Monitoring
The following Committees had been formed at the Government level to monitor the
follow up action on Audit related matters:
Departmental Audit and Accounts Committee: Departmental Audit and Accounts
Committee (DAAC) had been formed (November 2010) by all departments of the
Government under the Chairmanship of the departmental Secretary/Head of
Department to monitor the follow up action on Audit related matters. DAAC’s
function was to monitor the response and corrective action on findings reported in the
IRs issued by the Principal Accountant General (PAG). It was to hold meetings once
in three months and to send quarterly action taken report on the issues to the State
Audit and Accounts Committee. During 2019-20, no DAAC meeting was held.
State Audit and Accounts Committee: State Audit and Accounts Committee (SAAC)
had been formed (June 2010) at the State level under the Chairmanship of the Chief
Secretary. This was to monitor the response and corrective action on the findings
reported by Audit to review and oversee the working of DAAC and also to hold
meetings once in three months. The information in this regard was not furnished,
though called for.
After formation of DAAC and SAAC by the State Government, not a single Department
approached to settle outstanding paragraphs and IRs during the period 2016-20.
7.4 Outstanding Inspection Reports
The PAG conducts periodical inspection of Government departments to test check the
transactions and verify the maintenance of important accounts and other records as
prescribed in the rules and procedures. These inspections are followed up by issuing
IRs on irregularities detected during the inspection and not settled on the spot, to the
Heads of the Offices inspected, with copies to the higher authorities for taking prompt
corrective action. The Heads of the Offices are required to promptly comply with the
observations contained in the IRs, rectify the defects and omissions and report
compliance through initial reply to the PAG within one month from the date of the
issue of the IRs. Serious irregularities are reported to the Heads of the departments
and the Government.
The position of outstanding IRs pertaining to Civil (Expenditure audit including that
of Works, Forest and Autonomous Bodies), Revenue (Audit of Revenue departments)
and Commercial (Audit of State Public Sector Undertakings) audit as of March 2020
is shown below:
Table 7.2: Position of outstanding Inspection Reports and Paragraphs
Year Civil (including works, Forest and Revenue Commercial
Autonomous Bodies)
No. of IRs Paragraphs No. of IRs Paragraphs No. of IRs Paragraphs
Upto 2014-15 629 1499 56 134 50 120
2015-16 109 395 09 34 13 86
2016-17 75 273 10 27 07 36
2017-18 96 371 07 18 04 15
2018-19 128 535 06 35 07 32
2019-20 90 394 17 56 05 31
Total 1127 3467 105 304 86 320

104
 Chapter VII: Follow-up of Audit Observations

As of March 2020, 1318 Inspection Reports (IRs) and 4,091 paragraphs issued from
1990-91 onwards were pending for settlement. This large pendency of IRs was
indicative of inadequate actions by the Heads of offices and departments in respect of
remedial measures that should have been taken on the irregularities pointed out by
Audit through the IRs.
7.5 Departmental Audit Committee Meetings
The position of Audit Committee Meetings for the year 2019-20 are detailed below:
Table 7.3: Position of Audit Committee meetings held and IRs/Paragraphs discussed/settled
Sector No. of Discussed Settled
meetings IRs Paragraphs IR Paragraphs
Civil (including Works, Forest and Autonomous Bodies) 02 23 98 06 43
Revenue 01 13 36 06 18
Commercial - - - - -
Total 03 36 134 12 61
During 2019-20, three Audit Committee Meetings were held with Urban Development
Department, Agriculture Department and Excise Department where 36 IRs and
134 paragraphs were discussed, out of which 12 IRs and 61 paragraphs were settled.

Gangtok (K. S. GOPINATH NARAYAN)

The: Principal Accountant General (Audit), Sikkim

Countersigned

New Delhi (GIRISH CHANDRA MURMU)

The: Comptroller and Auditor General of India

105
APPENDICES
 Appendices

Appendix 2.1
Audit conducted during 2019-20 under Social Sector
(Reference : Paragraph 2.2)

Expenditure of the Unit

Sl. (i.e. of the Unit for the financial year for which audit
Name of the Unit
No. conducted)
2015-16 2016-17 2017-18 2018-19 2019-20
1 Chairman, Juvenile Welfare Board 54.01 51.53 57.46 30.39 --
2 Secretary, Culture -- -- -- 892.63 --
3 Member Secretary, SSIAFA -- -- -- 240.15 --
4 Trauma Centre, Health and Family Welfare -- -- -- 56.00 --
5 Principal Secretary, ESIC, Labour Dept -- -- -- 609.63 --
6 Principal, SIHS 202.05 198.50 213.61 251.15 --
7 Secretary, Social Welfare Division, SJED -- -- -- 2825.03 --
8 Secretary, Welfare Division, SJED -- -- -- 6254.82 --
9 Secretary, Women & Child Dev. Division -- -- -- 3043.74 --
10 Secretary, Food & Civil Supplies -- -- -- 814.88 --
11 DCSO/North, Food & Civil Supplies 31.60 34.29 33.14 51.27 --
12 DCSO/South, Food & Civil Supplies -- -- 155.64 192.55 --
13 DCSO/West, Food & Civil Supplies -- -- 128.97 169.98 --
14 Secretary, Ecclesiastical Affairs -- -- -- 2876.93 --
15 Addl. Chief Secretary, Education -- -- -- 28651.00 --
16 Director, Namgyal Institute of Tibetology -- -- 202.00 276.00 --
TOTAL 287.66 284.32 790.82 47236.15

107
Audit Report for the year ended 31 March 2020

Appendix 3.1
Audit conducted during 2019-20 under Economic Sector
(Reference : Paragraph 3.2)
(₹ in lakh)
Expenditure of the Unit
Sl. (i.e. of the Unit for the financial year for which audit
Name of the Unit
No. conducted)
2015-16 2016-17 2017-18 2018-19 2019-20
1 CCF/Wildlife, Forest & Environment -- 76.39 83.97 88.75 --
2 Joint Registrar/East, Cooperation -- -- 232.14 316.63 --
3 Director/Utilisation, Forest & Environment 148.87 133.94 129.37 166.09 --
4 Secretary, Cooperation -- -- -- 811.53 --
5 DFO(T)/North, Forest & Environment -- -- 287.13 389.44 --
6 DFO(T)/West, Forest & Environment -- -- 463.16 592.91 --
7 Jt. Director/West, SWC, Agriculture 45.68 50.90 26.60 29.71 --
8 DIC/East, Commerce & Industries 120.83 118.30 97.95 119.39 --
9 DIC(S/W), Jorethang, Commerce & Industries 99.21 95.01 108.73 146.92 --
10 Director, Handicraft & Handloom -- -- -- 1263.97 --
11 DFO/West, Wildlife, Forest & Environment -- 116.35 122.82 234.82 --
12 DFO/South, Wildlife, Forest &
-- 129.19 149.45 234.16 --
Environment
13 ADC(Development), Ravangla, RDD 48.35 48.50 54.50 84.74 --
14 ADC(Development), Soreng, RDD 45.71 54.50 67.75 82.06 --
15 BDO, Duga -- -- 94.62 136.26 --
16 BDO, Rakdong-Tintek -- 527.46 224.48 127.20 --
17 BDO, Nandok -- 104.98 121.68 170.90 --
18 BDO, Pakyong -- -- 123.32 162.63 --
19 CEO, SSOCA, Horticulture -- -- 57.08 69.39 --
20 BDO, Ranka -- 232.70 173.35 171.54 --
21 Project Director, JICA -- -- 1547.63 3224.44 --
22 Project Director, NERCDP, UDD -- -- -- 1039.00 --
23 M. Secretary, Sikkim Biodiversity Board -- 8.31 8.31 9.12 --
24 PMKSY under WRD -- -- -- 1189.00 --
25 CEO, Sikkim Organic Mission -- -- -- 1000.54 --
26 CEO, Sikkim Medicinal Plant Board 196.21 190.04 149.54 51.76 --
27 CEO, MOVCD-NER -- 17.89 20.89 13.46 --
28 SE, National Hydrology Project, WRD -- -- -- 73.15 --
29 BDO, Rhenock -- -- 95.44 128.95 --
30 Director, Himalayan Zoological Park -- 129.07 122.76 146.27 --
31 Project Director, SUDA -- -- -- 27.71 --
32 DFO, Kanchendzonga National Park 193.40 179.47 195.84 254.99 --
33 Project Director, SRDA -- -- 2.45 2.56 --
34 Secretary, Agriculture -- -- -- 7841.37 --
35 Joint Director/East, SWC, Agriculture -- -- -- 119.92 --
36 BDO, Sikkip -- 55.50 64.88 101.94 --
37 District Project Manager/West, NERLP -- -- -- 1268.02 --
38 Secretary, Sikkim Nationalised Transport -- -- -- 6582.00 --
39 RTO, North -- -- -- 49.23 --
40 District Project Manager/South, NERLP -- -- -- 1192.30 --
41 Secretary, Motor Vehicles -- -- -- 928.34 --
42 PD, NESRIP, Roads and Bridges -- -- -- 1850.75 --
43 Joint Director/North, Agriculture -- 151.43 142.05 276.48 --
44 Joint Director/North, SWC, Agriculture 38.08 27.58 140.92 130.00 --
45 Joint Director/West, Agriculture 289.86 200.03 337.73 436.19 --
46 BDO, Daramdin -- -- 114.16 114.56 --
47 BDO, Dentam -- -- 2274.52 1351.05 --

108
 Appendices

Expenditure of the Unit

Sl. (i.e. of the Unit for the financial year for which audit
Name of the Unit
No. conducted)
2015-16 2016-17 2017-18 2018-19 2019-20
48 Secretary, AHVS -- -- -- 5906.52 --
49 Additional Director/North, AHVS 312.61 310.34 310.76 213.03 --
50 Secretary, Horticulture -- -- -- 10574.91 --
51 Director, Fisheries -- -- -- 154.35 --
52 Assistant Director/North, Fisheries, -- -- 63.19 71.13 --
53 DE/West, Water Resources -- -- -- 195.75 --
54 DE/North, Building and Housing -- -- 71.33 339.03 --
55 Mission Director, SFAC, Horticulture -- -- 2600.00 2650.00 --
56 Joint Director/South, Horticulture -- -- 308.15 415.96 --
57 Joint Director/West, Horticulture -- -- 389.41 420.78 --
58 Secretary, Urban Development -- -- -- 24875.00 --
59 PCE-cum-Secretary, Water Resource -- -- -- 7286.25 --
60 PCE-cum-Secretary, Roads & Bridges -- -- -- 7207.00 --
61 Dy. Director/West, Fisheries -- -- 79.10 86.21 --
62 Dy. Director/Karfectar AHVS 141.79 148.26 147.39 186.64 --
63 ADC/East, Gangtok, RDD -- -- 422.49 565.24 --
64 Secretary, Forest and Environment -- -- -- 1800.37 --
65 DFO/South, Social Forestry 54.82 60.72 60.82 71.14 --
66 DFO/West, Social Forestry 65.25 73.28 80.63 82.42 --
67 Empowered Officer, NRDWP -- -- -- 2700.00 --
68 BDO, Chungthang -- -- 2087.01 92.61 --
69 DFO(T), Gangtok -- -- 753.78 870.49 --
70 PCE-cum-Secretary, Building & Housing -- -- -- 5997.00 --
71 Secretary, Tourism and Civil Aviation -- -- -- 1612.04 --
TOTAL 1800.67 3240.14 15209.28 109176.01

109
 Audit Report for the year ended 31 March 2020

Appendix 3.2
Details of standing properties and their monetary value
(Reference : Paragraph 3.5)

Sl. Name of work Date of Date of Date of Area Value of Value of Name of Total Rate Monetary Remarks
No. comm- completion land involved land standing Species/ CFT per value of
encement acquired Under (₹) properties Tree CFT species (₹)
acquisition (₹) (₹)
(hectare)
1 Constof Rural 18.02.2009 10.10.2020 June 2018 8.04 1986683.08 21982700.50 Dhupi 1152.6 325 374595 Total CFT taken into
Connectivity Road Account after deduction
Mangalbarey to of 15 percent (Timber
Arubotey(Phase-vii) able items).The price of
round timber in log form
is 15 percent less than the
price of sawn timber.
Saur 657.05 455 298957.75 -do-
Chilauney 6697.15 325 2176573.75 -do-
Panisaj 10025.75 780 7820085.00 -do-
Lampatey 3627.80 520 1886456.00 -do-
Utis 1564.85 325 508576.00 -do-
Simal 632.40 325 205530.00 -do-
Katus 2606.10 585 1524569.00 -do-
Lapsi 1232.50 325 400563.00 -do-
Siris 3236.80 325 1051960.00 -do-
Mawa 367.20 325 119340.00 -do-
Tooni 382.50 585 223762.50 -do-
Kaula 1330.25 455 605264.00 -do-
Khamari 59.5 975 58013.00 -do-
Pakhasaj 271.15 455 123373.00 -do-
Gokul 142.8 325 46410.00 -do-
Phusre 403.75 325 131220.00 -do-
Chap
Rani Chap 119 975 116025.00 -do-
Okhar 1048.90 975 1022678.00 -do-
Kimbu 374 975 364650.00 -do-
Malata 527.00 325 171275.00 -do-
Bamboo 21465.00 32 686880.00 -do-
Total (A) 19916756.00

110
 Appendices

Sl. Name of work Date of Date of Date of Area Value of Value of Name of Total Rate Monetary Remarks
No. comm- completion land involved land standing Species/ CFT per value of
encement acquired Under (₹) properties Tree CFT species (₹)
acquisition (₹) (₹)
(hectare)
2 Const. of PMGSY road 12.02.2009 30.11.2017 July 2017 4.256 1051658.00 12741671 Siris 3276 276.25 904995.00 15 percent deduction was
from Chakung – made by the department
Khaniserbong SPWD from the rates of
road to Lower trees/species. The price
Khaniserbong, West of round timber in log
Sikkim form is 15 percent less
than the price of sawn
timber.
Panisaj 5550 663 3679650.00 -do-
Chilauney 4169 276.25 1151686.00 -do-
Lampatey 2410 442 1065220.00 -do-
Teak 32.00 994.50 31824.00 -do-
Simal 336 276.25 92820.00 -do-
Gokul 1061 276.25 293101.00 -do-
Lapsi 504 276.25 139230.00 -do-
Chekrasi 552 386.75 213486.00 -do-
Phaleydo 369 276.25 101936.00 -do-
Okhar 264 828.75 218790.00 -do-
Katus 16 497.25 7956.00 -do-
Dhupi 48 276.25 13260.00 -do-
Utis 128 276.25 35360.00 -do-
Bamboo 14770 32 472640.00 -do-
Total(B) 8421954.00
3 Const.of PMGSY 29.19.2014 20.04.2016 August 4.8330 1194234.00 10636157.00 Kimbu 1437 828.75 1190914.00 15 percent deduction was
Road from Chakung – 2017 made by the department
Khaniserbong SPWD from the rates of
road to trees/species. The price
Mendogaon,West of round timber in log
Sikkim form is 15 percent less
than the price of sawn
timber.
Chilauney 640 276.25 176800.00 -do-
Okhar 917 828.75 759964.00 -do-

111
 Audit Report for the year ended 31 March 2020

Sl. Name of work Date of Date of Date of Area Value of Value of Name of Total Rate Monetary Remarks
No. comm- completion land involved land standing Species/ CFT per value of
encement acquired Under (₹) properties Tree CFT species (₹)
acquisition (₹) (₹)
(hectare)
Katus 1804 497.25 897040.00 -do-
Utis 1852 276.25 511616.00 -do-
Saur 406 386.75 157021.00 -do-
Mawa 800 276.25 221000.00 -do-
Malata 1984 276.25 548080.00 -do-
Lapsi 618 276.25 170723.00 -do-
Panisaj 1162 663 770406.00 -do-
Siris 1734 276.25 479018.00 -do-
Kaula 160 386.75 61880.00 -do-
Dhupi 680 276.25 187850.00 -do-
Payou 432 276.25 119340.00 -do-
Rani Chap 32 828.75 26520.00 -do-
Bamboo 7350 32 235200.00 -do-
Total(C) 6513372.00
4 Const. of PMGSY road 03.02.2009 29.02.2016 September 7.5150 1856961 10607252 Chilauney 3624 276.25 1001130.00 15 percent deduction was
from Upper Gelling to 2017 made by the department
Middle Gelling, West from the rates of
Sikkim trees/species. The price
of round timber in log
form is 15 percent less
than the price of sawn
timber.
Lampatey 4461 442 1971762.00 -do-
Panisaj 4812 663 3190356.00 -do-
Pakhasaj/Po 80 386.75 30940.00 -do-
kraj
Khamari 256 828.75 212160.00 -do-
Mawa 1028 276.25 283986.00 -do-
kaula 398 386.75 153927.00 -do-
Simal 360 276.25 99450.00 -do-
Phaledo 144 276.25 39780.00 -do-
Siris 1838 276.25 507748.00 -do-
Chekrasi 378 386.75 146192.00 -do-

112
 Appendices

Sl. Name of work Date of Date of Date of Area Value of Value of Name of Total Rate Monetary Remarks
No. comm- completion land involved land standing Species/ CFT per value of
encement acquired Under (₹) properties Tree CFT species (₹)
acquisition (₹) (₹)
(hectare)
Kimbu 272 828.75 225420.00 -do-
Sal 16 828.75 13260.00 -do-
Teak 128 994.50 127296.00 -do-
Malata 888 276.25 245310.00 -do-
Bamboo 30580 32 978560.00 -do-
Total(D) 9227277.00
5 Const.of PMGSY road 04.02.2008 20.06.2016 February 10.6400 2629144 13466581 Okhar 5888 637.50 3753600.00 Old rate prior to April
from Liching,Gitang to 2017 2016 taken into account
Karmatarblock,West by the department and
Sikkim 15 percent deduction was
made from the rates of
trees/species
Utis 4176 212.50 887400.00 -do-
Rani chap 2096 637.50 1336200.00 -do-
Bamboo 19900 32 636800.00 -do-
Total(E) 6614000.00
Grand total 50693359.00
(A to E)
Volume table for standing trees (all species) according to Forest Department
Girth at breast height volume in Cubic feet
3 feet to below 4 feet 15
4 feet to below 5 feet 24
5 feet to below 6 feet 35
6 feet to below 7 feet 46
7 feet to below 8 feet 64
8 feet to below 9 feet 84
9 feet to below 10 feet 106

113
 Audit Report for the year ended 31 March 2020

Appendix 4.1
Summarised financial position and working results of Government Companies and Statutory Corporations as per their latest finalised
accounts as on 30.09.2020
(Reference : Paragraph 4.1.4& 4.1.8)

Earning
Year in Loan Accumulated Free Net Net before Return on
Sector/ Capital
Sl. Period of which Paid up outstanding Profit (+)/ Reserves & profit (+)/ impact of interest Capital Manpower
Name of the Turnover Employed*
No. accounts accounts capital at the end loss(-) Surplus loss (-) Accounts and Employed
company
finalised of the year comments taxes**
12=5+6+7+8 14=13/12*100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
A. Working Government Companies
Agriculture and Allied
Sikkim
Poultry
Development
1 2017-18 2018-19 0.00 0.00 -1.72 2.80 0.00 -0.15 0.00 1.08 -0.15 -13.89 NA
Corporation
Limited
(SPDCL)
Sikkim
Hatcheries
2 2017-18 2018-19 0.46 0.00 -2.71 2.32 0.06 -0.14 0.00 0.07 -0.14 -200.00 NA
Limited
(SHL)
Sikkim
Livestock
Processing
3 and 2013-14 2014-15 0.69 0.01 -1.04 1.40 0.06 -0.02 0.00 1.06 -0.02 -1.89 NA
Development
Corporation
(SLPDC)
Sector wise total - - 1.15 0.01 -5.47 6.52 0.12 -0.31 0.00 2.21 -0.31 -14.03

114
 Appendices

Earning
Year in Loan Accumulated Free Net Net before Return on
Sector/ Capital
Sl. Period of which Paid up outstanding Profit (+)/ Reserves & profit (+)/ impact of interest Capital Manpower
Name of the Turnover Employed*
No. accounts accounts capital at the end loss(-) Surplus loss (-) Accounts and Employed
company
finalised of the year comments taxes**
12=5+6+7+8 14=13/12*100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Finance
Schedule
Caste,
Schedule
Tribe and
Other
4 Backward 2015-16 2018-19 18.31 20.10 -15.40 0.00 1.87 -0.24 0.02 23.01 0.49 2.13 27.00
Classes
Development
Corporation
Limited
(SABCCO)
Sector wise total 18.31 20.10 -15.40 0.00 1.87 -0.24 0.02 23.01 0.49 2.13 27.00
Infrastructure
Sikkim
Industrial
Development
and
5 2018-19 2019-20 17.14 340.32 14.17 2.78 3.61 0.84 374.41 1.25 0.33 32.00
Investment
Corporation
Limited
(SIDICO)

Gangtok
Smart City
6 Development 2018-19 2019-20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 NA
Limited
(GSDL)*

115
 Audit Report for the year ended 31 March 2020

Earning
Year in Loan Accumulated Free Net Net before Return on
Sector/ Capital
Sl. Period of which Paid up outstanding Profit (+)/ Reserves & profit (+)/ impact of interest Capital Manpower
Name of the Turnover Employed*
No. accounts accounts capital at the end loss(-) Surplus loss (-) Accounts and Employed
company
finalised of the year comments taxes**
12=5+6+7+8 14=13/12*100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Namchi
Smart City
7 2018-19 1.80 -5.00
Limited
(NSCL)* 2019-20 2.00 0.00 -0.20 0.00 0.00 -0.09 0.00 -0.09 59.00
Sector wise total 19.14 340.32 13.97 2.78 3.61 0.75 0.00 376.21 1.16 0.31 91.00
Power
TeestaUrja
8 Limited 2018-19 2019-20 3205.39 8830.06 -1169.47 1.22 1613.52 -313.06 0.00 10867.20 1081.47 9.95 NA
(TUL)
Teestavalley
Power
9 Transmission 2019-20 2020-21 388.45 960.51 18.39 0.00 300.43 34.19 0.00 1367.35 192.89 14.11 56.00
Limited
(TPTL)
Sikkim
Power
Investment
10 2019-20 2020-21 0.01 3006.74 -1000.30 0.00 223.81 -184.31 0.00 2006.45 221.65 11.05 4.00
Corporation
Limited
(SPICL)
Sikkim
Power
Development
11 2018-19 2019-20 72.34 48.79 -115.47 58.64 13.52 -0.03 0.00 64.30 3.81 5.93 70.00
Corporation
Limited
(SPDC)
Sector wise total - - 3666.19 12846.10 -2266.85 59.86 2151.28 -463.21 0.00 14305.30 1499.82 10.48 130.00

116
 Appendices

Earning
Year in Loan Accumulated Free Net Net before Return on
Sector/ Capital
Sl. Period of which Paid up outstanding Profit (+)/ Reserves & profit (+)/ impact of interest Capital Manpower
Name of the Turnover Employed*
No. accounts accounts capital at the end loss(-) Surplus loss (-) Accounts and Employed
company
finalised of the year comments taxes**
12=5+6+7+8 14=13/12*100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Service
Sikkim
Tourism
12 Development 2016-17 2018-19 6.46 0.00 -1.69 0.00 2.53 0.06 0.00 4.77 0.08 1.68 65.00
Corporation
(STDC)
Sector wise total - - 6.46 0.00 -1.69 0.00 2.53 0.06 0.00 4.77 0.08 1.68 65.00
Total A (All sector
wise working
- - 3711.25 13206.53 -2275.44 69.16 2159.41 -462.95 0.02 14711.50 1501.24 10.20 313.00
Government
companies)
B Statutory Corporations
Finance
State Bank
13 of Sikkim 2018-19 2019-20 0.53 67.61 6.85 70.40 188.16 23.24 0.49 145.39 31.96 21.98 NA
(SBS)
Sector wise total - - 0.53 67.61 6.85 70.40 188.16 23.24 0.49 145.39 31.96 21.98
Service
State
Trading
14 Corporation 2018-19 2019-20 1.61 194.33 2.68 0.00 158.57 0.08 1.12 198.62 0.31 0.16 NA
of Sikkim
(STCS)
Sector wise total 1.61 194.33 2.68 0.00 158.57 0.08 1.12 198.62 0.31 0.16

117
 Audit Report for the year ended 31 March 2020

Earning
Year in Loan Accumulated Free Net Net before Return on
Sector/ Capital
Sl. Period of which Paid up outstanding Profit (+)/ Reserves & profit (+)/ impact of interest Capital Manpower
Name of the Turnover Employed*
No. accounts accounts capital at the end loss(-) Surplus loss (-) Accounts and Employed
company
finalised of the year comments taxes**
12=5+6+7+8 14=13/12*100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Agriculture & Allied
Government
fruit
15 Preservation 2018-19 2019-20 0.00 0.00 0.81 0.09 5.19 0.62 0.90 0.62 68.89 NA
factory
(GFPF)
16 Temi Tea 2017-18 2019-20 0.00 0.00 -1.51 0.00 7.18 0.25 0.00 -1.51 0.25 -16.56 NA
Sector wise total 0.00 0.00 -0.70 0.09 12.37 0.87 0.00 -0.61 0.87 -142.62
Total B (All sector
wise working
- - 2.14 261.94 8.83 70.49 359.10 24.19 1.61 343.40 33.14 9.65 NA
Statutory
corporations)

Grand Total
- - 3713.39 13468.47 -2266.61 139.65 2518.51 -438.76 1.63 15054.90 1534.38 10.19 313.00
(A+B)
* Capital Employed= Paid up Capital+Free reserves & Surplus+ Long term loans+Accumulated Profit/Loss
** EBIT represents Total Income-Expenses (Excluding Interest and tax expenses from P & L Accounts of respective PSUs)
*** Return on Capital Employed= Percentage of EBIT in Capitl Employed

118
 Appendices

Appendix 4.2
Statement showing Rate of Real Return on Government Investment
(Reference : Paragraph 4.1.9)
PV of Funds infused by the Government during the
Average rate of Minimum
cumulative year in the form of Total PV of cumulative
interest on expected return Total Earnings
Financial Government investment Government
Revenue Government to recover cost of (Profit after tax)
year investment at Equity (less at the end investment at the
Grants / Loan Total borrowings (in funds for the for the year
the beginning disinvestment) of the year end of the year
Subsidy per cent) year
of the year
f=c+
a b c d e g=b+f h i = g*(1+h/100) j = g*h/100 k
d+e
Prior to
0 17.29 0 2.03 19.32 19.32 0 20.1 0 0
2002
2002-03 20.10 3.85 0 0 3.85 23.95 11.47 26.70 2.75 -3.26
2003-04 26.70 5.84 0 0 5.84 32.54 10.33 35.90 3.36 -22.49
2004-05 35.90 1.17 0 0 1.17 37.07 9.78 40.69 3.63 -3.05
2005-06 40.69 4.82 0 0 4.82 45.51 9.45 49.81 4.30 -3.05
2006-07 49.81 0.30 0 0 0.3 50.11 9.25 54.75 4.64 -4.05
2007-08 54.75 0.00 0 0 0 54.75 8.92 59.63 4.88 -3.41
2008-09 59.63 3.05 1.21 0 4.26 63.89 8.6 69.39 5.49 -2.69
2009-10 69.39 2.10 2.25 0 4.35 73.74 8.28 79.84 6.11 -2.17
2010-11 79.84 0.96 1.79 0 2.75 82.59 7.92 89.14 6.54 -11.59
2011-12 89.14 0.00 0 0 0 89.14 7.74 96.03 6.90 -7.03
2012-13 96.03 0.00 0 0 0 96.03 7.4 103.14 7.11 -15
2013-14 103.14 0.00 0.18 0 0.18 103.32 7.74 111.32 8.00 -17.1
2014-15 111.32 0.00 0.16 0 0.16 111.48 7.95 120.34 8.86 -27.76
2015-16 120.34 0.00 0.18 0 0.18 120.52 8.1 130.28 9.76 -80.12

119
Audit Report for the year ended 31 March 2020

PV of Funds infused by the Government during the

Average rate of Minimum
cumulative year in the form of Total PV of cumulative
interest on expected return Total Earnings
Financial Government investment Government
Revenue Government to recover cost of (Profit after tax)
year investment at Equity (less at the end investment at the
Grants / Loan Total borrowings (in funds for the for the year
the beginning disinvestment) of the year end of the year
Subsidy per cent) year
of the year
f=c+
a b c d e g=b+f h i = g*(1+h/100) j = g*h/100 k
d+e
2016-17 130.28 0.00 0.11 0 0.11 130.39 8.22 141.11 10.72 -335.17
2017-18 141.11 0.00 11.6 0 11.6 152.71 8.22 165.26 12.55 -319.01
2018-19 165.26 6.02 10.79 0 16.81 182.07 8.28 197.15 15.08 -254.35
2019-20 197.15 2.50 6.5 0 9 206.15 8.2 223.05 16.90 -184.69
Total 1393.44 47.90 34.77 2.03 84.7

120
 Appendices

Appendix 4.3
Details of loss to State Exchequer
(Reference : Paragraph 4.2)

Size of GI Length Rate of GI Pipe Revised rate w.e.f Excess expenditure Total excess
Pipe (in of GI from 07 15.11.2018 (in ₹ (in ₹ Per Mtr.) expenditure in lakh
MM Dia) Pipe (in September 2018 per meter)
meters) to 31 October
2018(in ₹ per
metre)
(A) (B) (C) (D) (E) = (D) – (C) (F) = (B) X (E)
15 250985 107.23 110.13 2.9 7.28
20 124836 138.03 141.76 3.73 4.66
25 134109 211.94 217.73 5.79 7.76
32 147169 264.12 271.58 7.46 10.98
40 69040 303.04 311.6 8.56 5.91
50 28350 429.88 442.02 12.14 3.44
65 18360 555.45 571 15.55 2.85
80 3100 726.27 746.61 20.34 0.63
Total 43.51
Add-18 % GST 7.83
Total Extra Expenditure 51.34

121
Audit Report for the year ended 31 March 2020

Appendix 5.1
Delay in issue of acknowledgement
(Reference : Paragraph 5.11.5)
NAME OF ARN
ARN DT Amount of Acknowledgement Delay
APPLICANT Refund Date
(in ₹)
MANOJ KUMAR SHAH AA1109190004969 27-09-2019 2074 21-02-2020 132

122
 Appendices

Appendix 5.2A
Delay in refund & Interest due (19 Pre-Automation cases)
(Reference : Paragraph 5.11.6)
Sl. GSTIN NAME ARN ARN DT Ack date = AMOUNT SANCTIONED Days To Delay Interest
No. (ARN dt. + OF DATE Process (in Due
15) REFUND (RFD 06 Date) days) (in ₹)
1 11ACYPA1603K1ZW MAA JAGDAMBA AA1107190001004 04-07-2019 19-07-2019 2577735 08-11-2019 127 52 22,034.34
TRADING
2 11BYOPS7568E1ZZ DEEPAK SHRESTHA AA110319000406U 13-03-2019 28-03-2019 289192 08-11-2019 240 165 7,843.84
3 11CGTPS3549D1Z7 VIKASH AGENCIES AA110619000323U 21-06-2019 06-07-2019 270422 08-11-2019 140 65 2,889.44
4 11AADCC8088Q1Z5 CHENNAI NETWORK AA110319000937F 31-03-2019 15-04-2019 198788 08-11-2019 222 147 4,803.59
INFRASTRUCTURE
LIMITED
5 11ACCFS6767L1ZS SHRISTIKA ENTERPRISE AA110319000296P 09-03-2019 24-03-2019 77464 08-11-2019 244 169 2,152.01
6 11HAXPS4871R1ZE PREMSHANKER AA110419000097P 04-04-2019 19-04-2019 19573 08-11-2019 218 143 460.10
7 11APPPL3876H1ZN VAJRA MEDICINE MART AA1104190002800 17-04-2019 02-05-2019 17146 08-11-2019 205 130 366.41
8 11AFXPA3117L1ZK PLANET ONE AA110519000393P 18-05-2019 02-06-2019 8449 08-11-2019 174 99 137.50
9 11CRLPS6706B1ZZ BALAJI BHOG AA110419000296N 17-04-2019 02-05-2019 3200 08-11-2019 205 130 68.38
10 11AAOFA1208J1ZW AISHWARYA AA110618000404U 05-02-2019 20-02-2019 1544545 11-02-2020 371 296 75,153.75
HEALTHCARE
11 11AAOFA1208J1ZW AISHWARYA AA110919000209G 14-09-2019 29-09-2019 351242 11-02-2020 150 75 4,330.38
HEALTHCARE
12 11BGYPR0059R1ZK HEMANT RAI AA1112180003150 21-12-2018 05-01-2019 309967 11-11-2019 325 250 12,738.37
13 11AUKPA5756B1Z6 SANJAY AGARWAL AA110819000111Z 07-08-2019 22-08-2019 190000 11-11-2019 96 21 655.89
14 11AOHPA3717R2ZY DIPCHANDSRIKRISHAN AA110218006323Y 05-04-2019 20-04-2019 2806 11-11-2019 220 145 66.88
15 11AAMCS4609N1Z3 STATE TRADING AA110319000780S 27-03-2019 11-04-2019 10268243 25-10-2019 212 137 2,31,246.46
CORPORATION OF SIKKIM
16 11AAMCS4609N1Z3 STATE TRADING AA110419000438L 24-04-2019 09-05-2019 5143817 25-10-2019 184 109 92,165.93
CORPORATION OF SIKKIM
17 11AOHPA3717R1ZZ GAJANAND AGARWAL AA1104190067488 06-06-2019 21-06-2019 875068 25-10-2019 141 66 9,493.89
18 11AQXPG3512G1Z3 C.B. GURUNG AA1112180001162 07-12-2018 22-12-2018 178470 25-10-2019 322 247 7,246.37
19 11BJYPP9971R1ZS DRISTANTA DEEP AA1104190000416 02-04-2019 17-04-2019 37280 08-11-2019 205 130 796.67
PRADHAN
Total interest due 4,74,650.20

123
 Audit Report for the year ended 31 March 2020

Appendix 5.2B
Delay in refund & Interest due (9 Post-Automation cases)
(Reference : Paragraph 5.11.6)

Sl. GSTIN Name ARN ARN Dt Ack RFD02 Amount Payment Days Delay Interest
No. Dt order date To (in Due
Process days) (in ₹)
1. 11BEYPS4573M1ZM SRI SADAFAL TOURS AA110220000345D 20-02-2020 20-02-2020 17000 13-05-2020 83 23 64.27
AND TRAVELS
2. 11CRGPP0925G2Z3 PRADHANS & AA110220000352I 21-02-2020 21-02-2020 10000 13-05-2020 83 23 37.81
PRADHANS
3. 11AYLPC0580G2ZW BAJRA SECURITY AA1102200004378 25-02-2020 25-02-2020 13799 13-05-2020 78 18 40.81
SERVICE AGENCY
4. 11ATJPD1696H2ZU DARPAN ENTERPRISE AA1103200002479 13-03-2020 13-03-2020 7000 13-05-2020 63 3 3.45
5. 11ALSPG2623E1ZK TARA GURUNG AA1110190001461 15-10-2019 15-10-2019 193434 24-03-2020 161 101 3211.53
6. 11BEJPR6378N1ZT M/S CHANDRA AA1111190003209 22-11-2019 22-11-2019 30388 24-03-2020 123 63 314.70
SHEKHAR RAI
7. 11ARDPD9621J1Z3 THE CHUMBI AA111119000415Y 26-11-2019 26-11-2019 335807 24-03-2020 119 59 3256.87
MOUNTAIN RETREAT
8. 11BCGPP1457H2ZS THE NEWA HOLIDAYS AA111219000088R 04-12-2019 04-12-2019 25852 24-03-2020 111 51 216.73
9. 11AILPL3951A1ZR ROYAL ELECTRICALS AA111219000329P 19-12-2019 19-12-2019 20000 24-03-2020 96 36 118.36
& HARDWARE STORE
Total interest due 7264.56

124
 Appendices

Appendix 5.3
Delay in sending copies of refund orders to the counterpart tax authorities
(Reference : Paragraph 5.11.7)

Sl. NAME GSTIN ARN ARN Date Refund Date of Refund IGST CGST Cess SGST Date of Delay in
No. type sanction amount forwarding sending
refund order sanction to the
to nodal counterpart
officer of tax authority
counterpart (in days) above
tax authority 7 days
1. Dipchandsrikrishan 11AOHPA3717R2ZY AA110218006323Y 05-04-2019 XSPAY 11-11-2019 2806 2806 0 0 0 28-11-2019 10
2. BalajiBhog 11CRLPS6706B1ZZ AA110419000296N 17-04-2019 EXBCL 08-11-2019 3200 0 1600 0 1600 28-11-2019 13
3. Planet One 11AFXPA3117L1ZK AA110519000393P 18-05-2019 EXBCL 08-11-2019 8449 0 0 8449 0 28-11-2019 13
4. Vajra Medicine 11APPPL3876H1ZN AA1104190002800 17-04-2019 EXBCL 08-11-2019 17146 0 17146 0 0 28-11-2019 13
Mart
5. Premshanker 11HAXPS4871R1ZE AA110419000097P 04-04-2019 EXBCL 08-11-2019 19573 0 19573 0 0 28-11-2019 13
6. Dristanta Deep 11BJYPP9971R1ZS AA1104190000416 02-04-2019 EXBCL 08-11-2019 37280 0 18640 0 18640 28-11-2019 13
Pradhan
7. Shristika 11ACCFS6767L1ZS AA110319000296P 09-03-2019 EXBCL 08-11-2019 77464 0 0 77464 0 28-11-2019 13
Enterprise
8. Sanjay Agarwal 11AUKPA5756B1Z6 AA110819000111Z 07-08-2019 EXBCL 11-11-2019 190000 0 90000 0 100000 28-11-2019 10
9. Chennai Network 11AADCC8088Q1Z5 AA110319000937F 31-03-2019 EXBCL 08-11-2019 198788 0 132493 0 66295 28-11-2019 13
Infrastructure
Limited
10. Hemant Rai 11BGYPR0059R1ZK AA1112180003150 21-12-2018 EXBCL 11-11-2019 309967 309967 0 0 0 28-11-2019 10
11. Vikash Agencies 11CGTPS3549D1Z7 AA110619000323U 21-06-2019 EXBCL 08-11-2019 270422 0 269922 0 500 28-11-2019 13
12. Deepak Shrestha 11BYOPS7568E1ZZ AA110319000406U 13-03-2019 EXBCL 08-11-2019 289192 289192 0 0 0 28-11-2019 13
13. Aishwarya 11AAOFA1208J1ZW AA110919000209G 14-09-2019 INVITC 11-02-2020 351242 294764 28239 0 28239 05-03-2020 16
Healthcare

125
 Audit Report for the year ended 31 March 2020

Sl. NAME GSTIN ARN ARN Date Refund Date of Refund IGST CGST Cess SGST Date of Delay in
No. type sanction amount forwarding sending
refund order sanction to the
to nodal counterpart
officer of tax authority
counterpart (in days) above
tax authority 7 days
14. Aishwarya 11AAOFA1208J1ZW AA110618000404U 05-02-2019 INVITC 11-02-2020 1544545 1490905 26820 0 26820 05-03-2020 16
Healthcare
15. MaaJagdamba 11ACYPA1603K1ZW AA1107190001004 04-07-2019 EXBCL 08-11-2019 2577735 2359479 109128 0 109128 28-11-2019 13
Trading

126
 Appendices

Appendix 5.4
Deviation in refund cases pertaining to inverted duty structure
(Reference : Paragraph 5.11.9.1)

AMOUNT OF DATE OF
ARN NAME GSTIN ARN DT
REFUND CLAIM SANCTION
AA110618000404U AISHWARYA 2019-02-05 ₹ 15,44,545 11/2/2020
11AAOFA1208J1ZW
AA110919000209G HEALTHCARE 2019-09-14 ₹ 3,51,242 11/2/2020

127
Audit Report for the year ended 31 March 2020

Appendix 5.5
Refund (Post-Automation) sanctioned without filing of GSTR 3B return
(Reference : Paragraph 5.11.9.2)
REFUND MODULE DATA GSTR 3B DATA
ARN GSTIN NAME SANCTIONED GSTR 3B Return period Filing date
DATE
AA110220000345D 11BEYPS4573M1ZM SRI SADAFAL TOURS AND 13-05-2020 June 2019 to May 2020 07-07-2020
TRAVELS
AA110220000352I 11CRGPP0925G2Z3 PRADHANS & PRADHANS 13-05-2020 February & March 2020 13-12-2020
April & May 2020 19-12-2020
AA1103200002479 11ATJPD1696H2ZU DARPAN ENTERPRISE 13-05-2020 March to May 2020 09-07-2020
AA110320000322J 11EGIPS8259D1Z7 GSSHARMA 13-05-2020 April 2020. 11-06-2020
May 2020. 11-08-2020
AA1109190004969 11BUVPS2043F1ZM MANOJ KUMAR SHAH 24-03-2020 March 2020. 29-06-2020
AA1110190001461 11ALSPG2623E1ZK TARA GURUNG 24-03-2020 September 2019 to March 2020 15-09-2020
AA1111190003209 11BEJPR6378N1ZT M/S CHANDRA SHEKHAR 24-03-2020 March 2020. 02-09-2020
RAI
AA111119000415Y 11ARDPD9621J1Z3 THE CHUMBI MOUNTAIN 24-03-2020 March 2020. 30-06-2020
RETREAT
AA111219000088R 11BCGPP1457H2ZS THE NEWA HOLIDAYS 24-03-2020 January and February 2020 18-11-2020
March 2020. 23-11-2020
AA111219000329P 11AILPL3951A1ZR ROYAL ELECTRICALS & 24-03-2020 February 2020. 11-05-2020
HARDWARE STORE March 2020. 01-06-2020

128
 Appendices

Appendix 5.6
Non-submission of statement in case of refunds (Pre-Automation)
of excess payment of tax
(Reference : Paragraph 5.11.9.3)

AMOUNT Remarks
ARN NAME GSTIN ARN DT
(in ₹)
AA1104190067488 Gajanand Agarwal 11AOHPA3717R1ZZ 2019-06-06 8,75,068 Sanctioned
Sanctioned
AA110218006323Y Dipchand Srikrishan 11AOHPA3717R2ZY 2019-04-05 2,806
Huhtamaki ppl Not sanctioned
AA110119007671Q 11AAACT0086E1ZY 2019-04-25 36,00,000
Limited

129
Audit Report for the year ended 31 March 2020

Appendix 5.7
Discrepancies in ARN Date and Application Date
(Reference : Paragraph 5.11.10.1)
GSTIN ARN ARN Date as in APPLICATION
GSTN DATE as per State
System
11ALSPG2623E1ZK AA1110190001461 2019-10-15 2019-10-24
11BCGPP1457H2ZS AA111219000088R 2019-12-04 2020-01-23
11AILPL3951A1ZR AA111219000329P 2019-12-19 2020-01-23
11BEYPS4573M1ZM AA110220000345D 2020-02-20 2020-02-26
11AYLPC0580G2ZW AA1102200004378 2020-02-25 2020-03-03
11ATJPD1696H2ZU AA1103200002479 2020-03-13 2020-03-19
11BUVPS2043F1ZM AA1109190004969 2019-09-27 2019-10-24

130
 Appendices

Appendix 5.8
Discrepancies in RFD05 Date (payment order date) issued
(Reference : Paragraph 5.11.10.2)
GSTIN ARN DT RFD05 Order date of RFD05
(as per GSTN) (as per State System)
11CRGPP0925G2Z3 AA110220000352I 2020-05-14 2020-05-13
11ATJPD1696H2ZU AA1103200002479 2020-05-15 2020-05-13
11EGIPS8259D1Z7 AA110320000322J 2020-05-14 2020-05-13

131
Audit Report for the year ended 31 March 2020

Appendix 6.1
Audit conducted during 2019-20 under General Sector
(Reference : Paragraph 6.2)
Expenditure of the Unit
Sl. (i.e. of the Unit for the financial year for which audit
Name of the Unit
No. conducted)
2015-16 2016-17 2017-18 2018-19 2019-20
1 RC, Sikkim House, New Delhi -- -- 900.00 1315.89 --
2 Secretary, SPCS -- 356.44 448.13 540.64 --
3 Secretary, Sikkim Information
128.76 170.47 175.73 242.26 --
Commission
4 Secretary, Skill Development -- -- -- 242.39 --
5 SDM, Kabi-Tingda 42.86 65.60 71.78 98.01 --
6 Principal Director, DESME, PDD -- -- 542.37 783.85 --
7 SDM, Rongli -- 94.80 108.30 116.96 --
8 Secretary, Planning and Development -- -- -- 4298.43 --
9 Secretary, Sports and Youth Affairs -- -- -- 2203.02 --
10 ADGP/Check Post -- -- -- 1322.13 --
11 Jt. Director, National Service Scheme -- -- -- 34.66 --
12 Secretary, Sikkim Legislative Assembly -- -- 1717.67 2080.63 --
13 District & Session Judge/East -- 471.11 498.78 647.23 --
14 District & Sessions Judge/South -- 334.17 387.12 489.30 --
15 Commandant, Sikkim Armed Police -- 4931.74 5160.35 6296.74 --
16 Commandant, Home Guards -- -- -- 284.42 --
17 SP, Crime Branch -- 559.15 541.21 764.18 --
18 IGP, Training 284.45 320.47 328.51 365.53 --
19 DGP, Police -- -- -- 1657.00 --
20 Addl. Chief Secretary, Finance -- -- -- 862.68 --
21 Director/Internal Audit, Finance 76.43 116.51 119.72 156.84 --
22 IGP, Special Branch 939.68 1037.19 1092.07 1604.66 --
23 SP, Reserve Lines -- 2146.10 2365.09 2655.56 --
24 Secretary, Home -- -- -- 5013.74 --
25 Director, Sikkim Fire Service 774.97 870.93 986.77 1071.26 --
26 Commandant 3rd IRB -- -- -- 3218.32 --
27 SDGP, Computer and Communication -- 731.33 694.59 859.09 --
28 Secretary, Science & Technology -- -- 280.31 326.00 --
29 District Collector/East -- 582.14 599.23 734.88 --
30 Registrar General, High Court -- -- 1485.70 1685.98 --
31 SP/South Police 1566.06 1688.39 1857.51 2542.08 --
32 Commandant 1st IRB -- -- -- 3783.80 --
33 Commandant 2nd IRB -- -- -- 3016.08 --
34 DC/North -- 236.00 239.88 324.46 --
35 Secretary, Information Technology -- -- -- 226.21
TOTAL 3813.21 14712.54 20600.82 51864.91

132
 Appendices

Appendix 6.2
Total number of Schemes implemented through DBT in Sikkim
(Reference : Para No. 6.3.1)
PFMS platform / Sponsoring
SI No Scheme Name Implementing Department Benefit Type
banks/post office
1 1. Rural Development PFMS
MGNREGA Cash
Department
2 National Rural Livelihood Programme Cash PFMS
3 Pradhan Mantri Awas Yojna Grameen Cash PFMS
4 Award for Prerna and Merit Scholarship Class V passed and Sponsoring banks
2. Education Department Cash
Class VIII passed
5 CSS for providing quality education in Madrasa SPQEM Cash and in kind Sponsoring banks
6 Flexipool under vocation education of RMSA Cash and in kind Sponsoring banks
7 Inclusive education for disabled at secondary education Cash and in kind Sponsoring banks
8 Kind benefit under IDESS Inclusive education for disabled Sponsoring banks
Cash and in kind
at secondary education under RMSA
9 Mid day meal scheme Cash and in kind Sponsoring banks
10 National scheme of incentive to girl for secondary education Cash Sponsoring banks
11 Post matric scholarship scheme Cash Sponsoring banks
12 Saaksharbharat Cash and in kind Sponsoring banks
13 Sarvashikshaabhiyan Cash and in kind Sponsoring banks
14 3. Social Justice and Sponsoring banks/Post Office
Indira Gandhi national disability pension scheme Cash
Welfare Department
15 Indira Gandhi old age pension scheme Cash Sponsoring banks/Post Office
16 Indira Gandhi national widow pension scheme Cash Sponsoring banks/Post Office
17 Sikkim payment of grants to the transgender Cash Sponsoring banks/Post Office
18 Unmarried women pension scheme Cash Sponsoring banks/Post Office
19 Anganwadi services – training programmes Cash and in kind Sponsoring banks
20 Anganwadi services – Honorarium to AWW and AWH Cash Sponsoring banks
21 Anganwadi services – Supplementary nutrition programme Cash and in kind Sponsoring banks
22 Dr BR Ambedkar post matric scholarship to OBC students Cash Sponsoring banks

133
Audit Report for the year ended 31 March 2020

PFMS platform / Sponsoring

SI No Scheme Name Implementing Department Benefit Type
banks/post office
23 National crèche scheme – honorarium to workers Cash Sponsoring banks
24 National crèche scheme – nutrition Cash Sponsoring banks
25 Post matric scholarship for OBC students Cash Sponsoring banks
26 Post matric scholarship for SC students Cash Sponsoring banks
27 Post matric scholarship to ST students Cash Sponsoring banks
28 Pre matric scholarship for OBC students Cash Sponsoring banks
29 Pre matric scholarship for SC students studying in class IX Sponsoring banks
Cash
and X
30 Pre matric scholarship for ST students Cash Sponsoring banks
31 Scheme for adolescent girls Cash Sponsoring banks
32 Upgradation of merit of SC students Cash Sponsoring banks
33 Upgradation of merit of ST students Cash Sponsoring banks
34 Pradhan mantra matruvandhanyojana Cash PFMS
35 Pradhan mantra matruvandhanyojana IGMSY Conditional PFMS
Cash
maternity benefit scheme
36 4. Health and Family Sponsoring banks
ASHA incentives Cash
Welfare Department
37 Family planning compensation scheme Cash Sponsoring banks
38 Janani shishusurakshakaryakram Cash Sponsoring banks
39 Janani surakshayojana Cash Sponsoring banks
40 Mukhya mantra jiwanrakshakoshyojana Cash Sponsoring banks
41 Mukhya mantra Sponsoring banks
Cash
shishusurakshayojanaavomsutkerishayogyojana
42 Mukhya mantra shravanshaktisamridhiyojana Cash Sponsoring banks
43 National ayush mission – medicines under ayush services Cash Sponsoring banks
44 NIKSHAY- dot provider honorarium Cash Sponsoring banks
45 NIKSHAY- TB notification incentives for private sector Kind Sponsoring banks
46 NIKSHAY- TB tribal patients Cash Sponsoring banks
47 Payments to contractual staff Cash Sponsoring banks

134
 Appendices

PFMS platform / Sponsoring

SI No Scheme Name Implementing Department Benefit Type
banks/post office
48 Agriculture Technology Management Agency ATMA – Sponsoring banks
5. Agriculture Department Kind
extension functionaries
49 Agriculture Technology Management Agency ATMA – Sponsoring banks
Cash
farmers
50 National mission on sustainable agriculture Cash and in kind Sponsoring banks
51 Pradhan mantra krishisichayyojana Cash and in kind Sponsoring banks
52 Sub mission on agriculture mechanization - CSS Cash and in kind Sponsoring banks
53 National food security mission Cash and in kind Sponsoring banks
54 Mission for integrated development of horticulture 6. Horticulture Department Cash and in kind Sponsoring banks
55 7. Urban Development and Sponsoring banks
Swachh Bharat Mission - urban Cash and in kind
Housing Department
56 8. Forest and Environment Sponsoring banks
Development of inland fisheries and acqua culture Cash and in kind
Department
57 9. Animal Husbandry and Sponsoring banks
Rashtriyakrishivikasyojana Veterinary Services Cash and in kind
Department
58 Livestock health and disease control Cash and in kind Sponsoring banks
59 10. Skill Development Sponsoring banks
Pradhan mantra kausalvikasyojana – component II Cash and in kind
Department
Source: Information furnished by the Directorate of Economics, Statistics, Monitoring and Evaluation (DESME), Government of Sikkim, Tadong.

135
Audit Report for the year ended 31 March 2020

Appendix 6.3
Sample selection
(Reference : Para No. 6.3.4)
(₹ in crore)
Name of Name of the Year Total Remarks Sample
the Deptt. Scheme/ selection
Programme 2017-18 2018-19 2019-20
Fund Fund Fund
transferred transferred transferred
Rural MGNREGA 101.49 97.99 86.41 285.89 Cash 1
Development
Deptt.
Social Justice IGNOAP 30.02 7.60 33.35 70.97 Cash 2
and Welfare
Deptt
Social Justice IGNWPS 2.47 6.36 0.41 9.24 Cash 3
and Welfare
Deptt
Health and Payments to 0.5693 1.7541 6.6655 8.98 Cash Being salary
Family contractual staff component
Welfare and seasonal.
Deptt. Thus, not
selected on
materiality
Social Justice IGNDPS 1.12 3.56 1.07 5.75 Cash 4
and Welfare
Deptt
Social Justice Pradhan Mantri 2.70 1.39 1.51 5.60 Cash Being one
and Welfare Matru Vandana time payment
Deptt Yojana and seasonal.
Thus, not
selected on
materiality
Social JusticeUnmarried 0.58 1.12 0.50 2.20 Cash 5
and Welfare Woman Pension
Deptt Scheme
Health and Janani suraksha 0.0051 0 0.13 0.18
Cash
Family yojana
Welfare ASHA incentives 0.0165 0.0022 0.15 0.17 Cash
Deptt. NIKSHAY- dot 0 0.0015 0 0.0015
provider Cash
honorarium
Source: Figure furnished by the Department and available in DBT Portal

136
 Appendices

Appendix 6.4
Ineligible beneficiaries
{Reference : Para No. 6.3.8.1 (a)}
(in ₹)
SI Name Bank Date of Age Amount involved during the scope
No sanction of audit (April 2017 to July 2020)
1 MAN BDR. CBI, 1.1.2018 69 @1000X27+@1500X4 = 33000
BARDEWA RHENOCK
2 SBI 1.4.2008 79 @1000X3+@1500X33+@2000X4 =
JAY JAY BHUTIA TADONG 60500
3 SBI, 1.4.2000 67 @600X3+@1000X33+@1500X4 =
SANTA BDR. RAI GANGTOK 39600
4 RAN BDR. SBI 1.4.2008 81 @1000X3+@1500X33+@2000X4 =
PRADHAN PHENGLA 60500
5 NIMA WANGDI SBI 6.2.2004 87 @1000X3+@2000X33+@2500X4 =
BHUTIA MAKHA 79000
6 DHAZANG SBI 1.8.2016 69 @1000X27+@1500X4 = 33000
BHUTIA LACHUNG
7 SBI 24.3.2004 82 @1000X3+@1500X33+@2000X4 =
HARKA BDR.RAI PHODONG 60500
8 DORJEE LAMA SBI 17.3.200 86 @1000X3+@2000X33+@2500X4 =
BHUTIA RUMTEK 79000
9 SBI, 1.9.2020 69 @1000X27+@1500X4 = 33000
PALDEN BHUTIA TADONG
10 1.4.2000 82 @1000X3+@1500X33+@2000X4 =
ADOW LAMA SBS, SANG 60500
11 DAWA DOMA SBS, 1.8.2019 67 @1000X27+@1500X4 = 33000
LEPCHA GANGTOK
12 NARBADA PO, 1.4.1997 77 @1000X3+@1500X33+@2000X4 =
GURUNG1 GANGTOK 60500
Total 632100
(Source: State Government Pension Data, beneficiaries list, their bank account, and PO account and
Departmental information)

1
Central Government pensioner

137
Audit Report for the year ended 31 March 2020

Appendix 6.5
Double pension credited under IGNOAP
{Reference : Para No. 6.3.8.1 (b)})
SI No Raw NAME OF FATHER’S GPU BDO BANK/POST_OFFICE BANK/POST
data BENEFICIARY NAME/HUSBAND’S ACCOUNT NO. OFFICE
Sl_no NAME BRANCH
1 45 JUMTHI BHUTIA W/O NAKPHANG TUMIN RAKDONG 1236138751 CBI GANGTOK
BHUTIA TINTEK
2 44 NAKPHYANG LT.PASSANG BHUTIA TUMIN RAKDONG 1236138751 CBI GANGTOK
BHUTIA TINTEK
3 172 BHAKTA PD. S/O LT JAI NARAYAN TARPIN GPU RHENOCK 2185097483 CBI RHENOCK
LUITAL LUITAL
4 171 BISHNU MAYA W/O BHAKTI PD. RHENOCK GPU RHENOCK 2185097483 CBI RHENOCK
LUITEL LUITEL
5 890 NAR MAYA W/O PADAM BDR. CHUJACHEN RONGLI 2361702539 CBI, RONGLI
GURUNG GURUNG
6 294 PADAM LT. JIT BDR.GURUNG CHUJACHEN RONGLI 2361702539 CBI, RONGLI
BDR.GURUNG
7 902 SOVA KUMARI W/O MON BAHADUR DENTAM UPPER 2380293394 CBI,DENTAM
PANTHA PANTHA KHANDU
8 189 MON BDR LT PADAM LALL DENTAM LICHING 2956215868 CBI,DENTAM
CHETTRI CHETTRI
9 737 NARBADA RAI DEO NARAYAN RAI DALAPCHAND RONGLI 2955579825 CBI, RONGLI
10 449 DEO NARAYAN LT. HARKA BDR. RAI DALAPCHAND RONGLI 2955579825 CBI, RONGLI
RAI
11 404 DEVI SHARMA RUDRA MANI JORETHANG NANDUGAON 11221198894 SBI JORETHANG
SHARMA
12 327 RUDRA MANI LT:KEDARNATH SALGHARI NANDUGAON 11221198894 SBI JORETHANG
SHARMA SHARMA
13 145 KANCHI BHUTIA W/O SUNGRAP BHUTIA MARTAM NAZITAM MARTAM 11724936310 SBI RUMTEK
14 144 SUNGRAPH LT. PEMBA BHUTIA MARTAM NAZITAM MARTAM 11724936310 SBI RUMTEK
BHUTIA

138
 Appendices

SI No Raw NAME OF FATHER’S GPU BDO BANK/POST_OFFICE BANK/POST

data BENEFICIARY NAME/HUSBAND’S ACCOUNT NO. OFFICE
Sl_no NAME BRANCH
15 573 NORDEN BHUTIA KINZANG BHUTIA RALONG NAMLUNG RAVANGLA 11769967449 SBI RAVANGLA

16 568 NIM ZIM BHUTIA NORDEN BHUTIA RALONG NAMLUNG RAVANGLA 11769967449 SBI RAVANGLA

17 201 MAN BDR. S/O LT ABHI KESHOR PATUK SINGBEL KHAMDONG 11796086355 SBI MAKHA
PRADHAN PRADHAN GPU
18 200 NAR MAYA MAN BDR. PRADHAN PATUK SINGBEL KHAMDONG 11796086355 SBI MAKHA
PRADHAN GPU
19 492 LILA MAYA LAXMI PSD. DHUNGEL NAGI KAREK NAMTHANG 11894384928 SBI NAMTHANG
DHUNGEL
20 482 LAXMI LT.BADRINATH NAGI KAREK NAMTHANG 11894384928 SBI NAMTHANG
PSD.DHUNGEL DHUNGEL
21 532 NAMGAY LT. KADA BHUTIA RONGONG KABI TINGDA 11897421685 SBI PHODONG
BHUTIA TUMLONG
22 507 CHHODEN NAMGAY BHUTIA RONGONG KABI TINGDA 11897421685 SBI PHODONG
BHUTIA TUMLONG
23 531 LHANZEY W/O GOLAY BHUTIA RONGONG KABI TINGDA 11897428091 SBI PHODONG
BHUTIA TUMLONG
24 520 GOLEY BHUTIA LT.KHEDUP BHUTIA RONGONG KABI TINGDA 11897428091 SBI PHODONG
TUMLONG
25 553 RINCHEN LAMA LT.LEDUP BHUTIA RONGONG KABI TINGDA 30609974196 SBI PHODONG
TUMLONG
26 523 JIGDEN BHUTIA S/O RINCHEN BHUTIA RONGONG KABI TINGDA 30609974196 SBI PHODONG
TUMLONG
27 237 BUDHI LALL LT.LALL BDR.SUBBA PATUK SINGBEL KHAMDONG 30692966471 SBI MAKHA
SUBBA GPU
28 236 MAHARANI W/O BUDDHI LALL PATUK SINGBEL KHAMDONG 30692966471 SBI MAKHA
SUBBA SUBBA GPU
29 341 TIK MAYA W/O INDRA BDR. PATUK SINGBEL KHAMDONG 30753312487 SBI MAKHA
GURUNG GURUNG GPU
30 245 INDRA BDR. LT. DAMBER BDR. PATUK SINGBEL KHAMDONG 30753312487 SBI MAKHA
GURUNG GURUNG GPU

139
Audit Report for the year ended 31 March 2020

SI No Raw NAME OF FATHER’S GPU BDO BANK/POST_OFFICE BANK/POST

data BENEFICIARY NAME/HUSBAND’S ACCOUNT NO. OFFICE
Sl_no NAME BRANCH
31 340 KRISHNA PSD. LT. KHARA NANDA PATUK SINGBEL KHAMDONG 30807455971 SBI MAKHA
SHARMA SHARMA GPU
32 62 SUBHADRA DEVI W/O KRISHNA PD. SIMIK LINGZEY RAKDONG 30807455971 SBI MAKHA
BAHUN BAHUN TINTEK
33 527 KARSONG ACHING BHUTIA RONGONG KABI TINGDA 30815646036 SBI PHODONG
BHUTIA TUMLONG
34 497 ACHING BHUTIA LT.CHOLEY BHUTIA RONGONG KABI TINGDA 30815646036 SBI PHODONG
TUMLONG
35 290 DILLI RAM RAI PADAM LALL RAI LEGSHIP HINGDEM RAVANGLA 30858867962 SBI HINGDAM
36 150 BIR LASHI RAI W/O LT. PADAM LALL RABONG SANGMO RAVANGLA 30858867962 SBI HINGDAM
RAI
37 537 NAR BDR. RAI LT.BIRKHA BDR.RAI KEWZING BAKHIM RAVANGLA 30891259772 SBI KEWZING
38 369 JAS MAYA RAI NAR BDR.RAI KEWZING BAKHIM RAVANGLA 30891259772 SBI KEWZING
39 216 PURNA BDR AITA RAJ LIMBOO LAMATING TINGMO SIKIP 31108241173 SBI KEWZING
LIMBOO
40 73 DIL MAYA PURNA BDR.LIMBOO LAMATING TINGMO SIKIP 31108241173 SBI KEWZING
LIMBOO
41 217 NAR BDR LT.BIRKHA BDR RAKDONG TINTEK RAKDONG 31532064991 SBI, DIKCHU
GURUNG GURUNG TINTEK
42 105 MON MAYA W/O/ NAR RAKDONG TINTEK RAKDONG 31532064991 SBI, DIKCHU
GURUNG BDR.GURUNG TINTEK
43 790 TULASA DEVI W/O GUMAN SINGH BARFUNG ZARUNG RAVANGLA 31892401483 SBI RAVANGLA
SUNNAR KAMI
44 327 GUMAN SINGH LT KRISHNA BIR BARFUNG ZARUNG RAVANGLA 31892401483 SBI RAVANGLA
SUNAR SUNAR
45 314 CHANDRA MAYA W/O PURNA BDR. MARTAM NAZITAM MARTAM 32898746822 SBI RUMTEK
CHETTRI CHETTRI
46 265 PURNA BDR. LT. HASTA BDR. MARTAM NAZITAM MARTAM 32898746822 SBI RUMTEK
KHARKA KHARKA
47 354 PHIGUM BHUTIA LT. CHEZOR BHUTIA TINGCHIM MANGAN 32920232858 SBI MANGAN
CHANDEY

140
 Appendices

SI No Raw NAME OF FATHER’S GPU BDO BANK/POST_OFFICE BANK/POST

data BENEFICIARY NAME/HUSBAND’S ACCOUNT NO. OFFICE
Sl_no NAME BRANCH
48 364 THEGAN BHUTIA LT CHUJOR BHUTIA TINGCHIM MANGAN 32920232858 SBI MANGAN
CHANDEY
49 617 PEM LHAMU LHA TSHERING RAVANGLA RABONG 32924664228 SBI RAVANGLA
SHERPA SHERPA SANGMO
50 440 LAK TSHERING CHAK TSHERING RAVANGLA RABONG 32924664228 SBI RAVANGLA
SHERPA SHERPA SANGMO
51 132 LACHUMAN PURNA BDR.GURUNG SIKIP LAMATING 32943442214 SBI KEWZING
GURUNG TINGMO
52 93 GOMA GURUNG LAXUMAN GURUNG SIKIP LAMATING 32943442214 SBI KEWZING
TINGMO
53 330 LALL BDR. LT. JIT BDR. CHETTRI MARTAM NAZITAM MARTAM 32960054332 SBI SINGTAM
CHETTRI
54 329 CHANDRA MAYA LALL BDR. CHETTRI MARTAM NAZITAM MARTAM 32960054332 SBI SINGTAM
CHETTRI
55 960 THAL NATH TIL CHAND ADHIKARI LINGI SOKPEY YANGANG 33035953164 SBI MAKHA
ADHIKARI
56 375 GITA DEVI GITA PSD. BAHUN LINGMO PAIYONG YANGANG 33035953164 SBI MAKHA
BHAUN
57 519 DHARMA NANDA LT. CHABI LALL TUMIN RAKDONG 33291506462 SBI, RAKDONG
LUITEL LUITEL TINTEK TINTEK
58 518 JANUKA DEVI W/O DARMA NANDA TUMIN RAKDONG 33291506462 SBI, RAKDONG
LUITEL LUITEL TINTEK TINTEK
59 87 BHIM BDR. LT.MON BDR.SUBBA DARAMDIN 05-SAPREY 33361090524 SBI SOMBARIA
SUBBA NAGI
60 51 ASH HANGMA BHIM BDR SUBBA DARAMDIN LOWER 33361090524 SBI SOMBARIA
SUBBA SIKTAM
61 268 DEO MAYA RAI W/O ASHA DHAN RAI LINGMO PAIYONG YANGANG 33445101601 SBI MAKHA
62 71 ASH DHAN RAI LT. PADAM DHOJ RAI LINGMO PAIYONG YANGANG 33445101601 SBI MAKHA
63 441 INDRA BDR.RAI LT.SIBI RAI LINGMO PAIYONG YANGANG 33445308866 SBI MAKHA

141
Audit Report for the year ended 31 March 2020

SI No Raw NAME OF FATHER’S GPU BDO BANK/POST_OFFICE BANK/POST

data BENEFICIARY NAME/HUSBAND’S ACCOUNT NO. OFFICE
Sl_no NAME BRANCH
64 168 BUDDHI MAYA INDRA BDR. RAI LINGMO PAIYONG YANGANG 33445308866 SBI MAKHA
RAI

65 189 SHIVA SHARMA SHREE NARAYAN SAMDONG KAMBAL RAKDONG 33762013509 SBI, DIKCHU
BHATTARAI BHATTARAI TINTEK
66 188 LAXMI DEVI W/O SHIVA SHANKER SAMDONG KAMBAL RAKDONG 33762013509 SBI, DIKCHU
BHATTARAI BHATTARAI TINTEK
67 367 TSHERING W/O CHODEN BHUTIA TINGCHIM MANGAN 33876146563 SBI MANGAN
CHODEN BHUTIA CHANDEY
68 326 CHEDEN BHUTIA NIMCHUNG BHUTIA TINGCHIM MANGAN 33876146563 SBI MANGAN
CHANDEY
69 903 WANG DOLMA JIT BDR TAMANG KATENG PAMPHOK NAMTHANG 33977168425 SBI NAMTHANG
TAMANG
70 360 JIT BDR.TAMANG LT.SHER NAGI KAREK NAMTHANG 33977168425 SBI NAMTHANG
BDR.TAMANG
71 125 KHINA MAYA W/O BHAGAR SINGH LAMATING TINGMO SIKIP 34571327069 SBI KEWZING
CHETTRI CHETTRI
72 126 KHINA MAYA BHAGAR SINGH LAMATING TINGMO SIKIP 34571327069 SBI KEWZING
CHETTRI CHETTRI
73 1463 BHAKTA S/O CHANDRA BDR. ASSAMLINGZEY NANDOK 14980100002167 UCO, RANIPOOL
BDR.RAI RAI
74 1462 KANTA MAYA W/O BHAKTA BDR. RAI ASSAMLINGZEY NANDOK 14980100002167 UCO, RANIPOOL
RAI
75 1255 TSHERING DOMA W/O KARMA NIDUP RONGAY NANDOK 100134001002111 SISCO
LEPCHA LEPCHA TATHANGCHEN GANGTOK
76 1254 KARMA NIDUP S/O KUNZANG LEPCHA GANGTOK NANDOK 100134001002111 SISCO
LEPCHA MUNICIPAL GANGTOK
CORPORATION
77 155 JAG MAYA RAI LT RAN DHOJ RAI SALGHARI NANDUGAO N 100134001003655 SISCO
JORETHANG
SALGHARI

142
 Appendices

SI No Raw NAME OF FATHER’S GPU BDO BANK/POST_OFFICE BANK/POST

data BENEFICIARY NAME/HUSBAND’S ACCOUNT NO. OFFICE
Sl_no NAME BRANCH
78 1321 JAG MAYA RAI LT. RANDHOJ RAI GANGTOK NANDOK 100134001003655 SISCO
MUNICIPAL GANGTOK
CORPORATION
79 887 SHUBI MAYA NAR DHOJ LIMBOO MICKHOLA NAMCHI 100234001002435 SISCO NAMCHI
LIMBOO BOOMTAR
80 645 NAR DHOJ LT. DAL BDR. LIMBOO MICKHOLA NAMCHI 100234001002435 SISCO NAMCHI
LIMBOO BOOMTAR
81 803 HISSEY LEPCHA S/O CHEWANG SIMIK LINGZEY RAKDONG 100534001003730 SISCO SINGTAM
LEPCHA TINTEK
82 802 NIM LHAMU W/O HISHEY LEPCHA SIMIK LINGZEY RAKDONG 100534001003730 SISCO SINGTAM
LEPCHA TINTEK
83 1002 KHARA NANDA LT. BANU BHAKA AMBA PAKYONG 100834001000510 SISCO
DANGAL DANGAL PAKYONG
84 1001 SAVITRA DEVI KHARA NANDA AMBA PAKYONG 100834001000510 SISCO
DANGAL DANGAL PAKYONG
85 148 KHARGA LT.HASTA NOMOK SWAYEM MANGAN 100434001100374 SISCO MANGAN
BDR.DARJEE BDR.DARJEE
86 376 DIL MAYA KHARKA BDR.DARJEE TINGCHIM MANGAN 100434001100374 SISCO MANGAN
DARJEE MANGSHILA
87 147 MAITA MAYA KHARKA BDR.JOGI KALUK UPPER 100634001000379 SISCO
JOGI SANGADORJI JORETHANG
88 4 KHARGA CHANDRA BDR.JOGI KALUK UPPER 100634001000379 SISCO,
BDR.JOGI HATIDUNGA JORETHANG
89 367 SANJUK SHERPA LT.NIMA SHERPA SORENG UPPER 2812201540205587 SBS, SORENG
BURIKHOP
90 366 NIMA SHERPA LT.KESANG SHERPA SORENG UPPER 2812201540205587 SBS, SORENG
BURIKHOP
91 532 GANGA BDR. S/O LT. NAREY SORENG DODAK 2812201540206668 SBS SORENG
BHUJEL BHUJEL

143
Audit Report for the year ended 31 March 2020

SI No Raw NAME OF FATHER’S GPU BDO BANK/POST_OFFICE BANK/POST

data BENEFICIARY NAME/HUSBAND’S ACCOUNT NO. OFFICE
Sl_no NAME BRANCH
92 75 NAR MAYA LT. NAREY BHUJEL SORENG W/NO. 1 2812201540206668 SBS, SORENG
BHUJEL
93 378 TIKA RAM LT.BALARAM SIGTEL RIWA MACHONG PARAKHA 33340896752 SBI PAKYONG
SIGTEL
94 377 LAXIMA DEVI W/O TIKA RAM SIGTEL RIWA MACHONG PARAKHA 33340896752 SBI PAKYONG
SIGTEL
95 632 MADHU MAYA LT.TEK BDR. BASNETT SORENG SAMTHANG 2812201540206799 SBS, SORENG
BASNETT
96 633 TARA KUMAR DILLI SINGH BASNET SORENG MALBASEY 2812201540206799 SBS, SORENG
BASNET
97 11 DILLI SINGH LT.TEK BDR.BASNET SORENG MALBASEY 2812201540206799 SBS SORENG
BASNET

144
 Appendices

Appendix 6.6
Double pensions credited under IGNWPS and UPWS
{Reference : Para No. 6.3.8.1 (c)}

Sl. Scheme RAW DATA BAC

NAME OF BENEFICIARY BANK ACCOUNT NO. BANK BRANCH
No. SL. NO.
1
IGNWPS 83 CHANDRA KALA PRADHAN NANDOK XXXX1484 CBI, GANGTOK
2
IGNWPS 1289 CHANDRA KALA BHUTIA DARAMDIN XXXX1484 CBI GANGTOK
3 UWPS 497 HARI MAYA SHARMA SORENG XXXX5555 CBI SORENG
4 UWPS 476 GANGA MAYA SHARMA SORENG XXXX5555 CBI SORENG
(Source: Beneficiaries list and their bank account)

145
Audit Report for the year ended 31 March 2020

Appendix 6.7
Delayed payment of pension through Axis Bank
{Reference : Para No. 6.3.8.3 (A)(iv)})

Name of the Year Source of Amount Period of pension Withdrawn Credited Delay in Actual disbursement of Delay in
Scheme funding from Cash into Bank crediting into pension from Bank A/c disbursement of
Book A/c Bank pension from
A/c(Col.6 Bank A/c (Col. 7
minus Col.7) minus Col. 9)
(in day) (in day)
1 2 3 4 5 6 7 8 9 10
IGNOAP 2017-18 GoS 48652200 4/17 to 6/17 28.6.17 30.6.17 2 20.7.17 to 24.7.17 20 to 24
34966120 7/17 to 8/17 24.8.17 31.8.17 7 13.9.17 to 20.9.17 13 to 20
5633200 9/17 to 10/17 15.11.17 23.11.17 8 4.12.17 to 14.12.17 12 to 22
56351600 11/17 to 12/17 15.12.17 21.1.18 37 1.2.18 to 19.2.18 12 to 31
61939000 1/18 to 3/18 14.3.18 20.3.18 6 4.4.18 to 6.4.18 16 to 18
GoI 21712480 7/17 to 8/17 24.8.17 31.8.17 7 13.9.17 to 20.9.17 14 to 21
19748000 1/18 to 3/18 30.3.18 7.4.18 8 7.4.18 0
2018-19 GoS 58492900 4/18 to 5/18 26.5.18 12.6.18 17 22.6.18 to 5.7.18 11 to 24
75577800 6/18 to 8/18 31.8.18 13.9.18 13 21.9.18 to 12.10.18 9 to 20
2149500 9/18 6.10.18 12.10.18 6 15.10.18 to 16.11.18 3 to 36
94312000 9/18 to 12/18 4.1.19 11.1.19 7 15.1.19 to 16.1.19 5 to 6
17257500 9/18 to 12/18 4.1.19 30.1.19 26 8.2.19 to 14.2.19 9 to 15
13225500 9/18 to 12/18 28.1.19 7.2.19 10 8.2.19 to 14.2.19 2 to 8
30717000 1/19 12.2.19 28.2.19 16 1.3.19 to 4.3.19 2 to 4
995500 Arrear 12.2.19 28.2.19 16 1.3.19 to 4.3.19 2 to 4
11820000 2/19 5.3.19 30.3.19 25 27.6.19 to 14.7.19 90 to 107
6665100 3/19 20.3.19 12.4.19 23 27.6.19 to 14.7.19 77 to 94
GoI 25192600 9/18 6.10.18 12.10.18 6 15.10.18 to 16.11.18 16 to 34
19368000 2/19 15.3.19 30.3.19 15 27.6.19 to 14.7.19 90 to 107
2755185 3/19 31.3.19 12.4.19 12 27.6.19 to 14.7.19 77 to 94
2019-20 GoS 110384800 4/19 to 7/19 13.9.19 3.10.19 20 4.10.19 to 5.10.19 2 to 3
28500 9/19 30.9.19 3.10.19 3 16.3.20 164

146
 Appendices

Name of the Year Source of Amount Period of pension Withdrawn Credited Delay in Actual disbursement of Delay in
Scheme funding from Cash into Bank crediting into pension from Bank A/c disbursement of
Book A/c Bank pension from
A/c(Col.6 Bank A/c (Col. 7
minus Col.7) minus Col. 9)
(in day) (in day)
63217000 8/19 to 9/19 1.10.19 3.10.19 2 4.10.19 to 5.10.19 2 to 3
36635400 10/19 to 3/20 6.3.20 19.3.20 13 25.3.20 to 31.3.20 7 to 13
59734300 2019-20 18.3.20 19.3.20 1 25.3.20 to 31.3.20 7 to 13
GoI 1106000 8/19 30.9.19 3.10.19 3 4.10.19 to 5.10.19 2 to 3
14189200 4/19 to 7/19 30.9.19 3.10.19 3 4.10.19 to 5.10.19 2 to 3
48095000 10/19 to 3/20 12.3.20 19.3.20 7 25.3.20 to 31.3.20 7 to 13
IGNWPS 2017-18 GoS 3175000 4/17 to 6/17 20.6.17 30.6.17 10 20.7.17 to 26.7.17 21 to 27
2839640 7/17 to 8/17 25.8.17 31.8.17 6 14.9.17 to 20.9.17 15 to 21
4660300 9/17 to 10/17 15.11.17 23.11.17 8 4.12.17 to 14.12.17 12 to 22
4611000 11/17 to 12/17 6.1.18 21.1.18 15 1.2.18 to 12.3.18 12 to 23
5350000 1/18 to 3/18 14.3.18 20.3.18 6 4.4.18 to 6.4.18 16 to 18
GoI 1753760 7/17 to 8/17 25.8.17 31.8.17 6 14.9.17 to 20.9.17 15 to 21
2380000 1/18 to 3/18 6.3.18 7.4.18 32 7.4.18 33
2018-19 GoS 5195700 4/18 to 5/18 26.5.18 12.6.18 17 22.6.18 to 26.7.18 11to 15
6820200 6/18 to 8/18 31.8.18 13.9.18 13 6.10.18 to 12.10.18 24 to 30
652500 9/18 6.10.18 12.10.18 6 15.10.18 to 10.1.19 4 to 90
2273900 9/18 21.9.18 12.10.18 21 15.10.18 to 10.1.19 4 to 90
9639000 10/18 to 12/18 2.1.19 11.1.19 9 14.1.19 to 15.1.19 4 to 5
3214500 1/19 to 3/19 12.2.19 28.2.19 16 1.3.19 to 4.3.19 3 to 6
96600 1/19 to 3/19 7.2.19 14.2.19 7 1.3.19 to 4.3.19 13 to 15
1880000 2/19 5.3.19 30.3.19 25 6.6.19 to 3.10.19 69 to 188
GoI 1340500 2/19 5.3.19 30.3.19 25 6.6.19 to 3.10.19 69 to 188
2019-20 GoS 11940000 4/19 to 7/19 30.9.19 3.10.19 3 4.10.19 to 16.3.20 2 to 164
6769500 8/19 to 9/19 1.10.19 3.10..19 2 4.10.19 to 16.3.20 2 to 164
6290500 10/19 to 3/20 12.3.20 19.3.20 7 25.3.20 to 30.3.20 7 to 12
GoI 307500 8/19 30.9.19 3.10.19 3 3.10.19 0
984000 4/19 to 7/19 30.9.19 3.10.19 3 3.10.19 0
2477000 10/19 to 3/20 12.3.20 19.3.20 7 19.3.20 to 31.3.20 0 to 13

147
Audit Report for the year ended 31 March 2020

Name of the Year Source of Amount Period of pension Withdrawn Credited Delay in Actual disbursement of Delay in
Scheme funding from Cash into Bank crediting into pension from Bank A/c disbursement of
Book A/c Bank pension from
A/c(Col.6 Bank A/c (Col. 7
minus Col.7) minus Col. 9)
(in day) (in day)
IGNDPS 2017-18 GoS 1475000 4/17 to 6/17 28.6.17 30.6.17 2 20.7.17 to 25.7.17 21 to 26
943870 7/17 to 8/17 24.8.17 31.8.17 7 13.9.17 to 20.9.17 14 to 22
2139000 9/17 to 10/17 15.11.17 23.11.17 8 4.12.17 to 14.12.17 12 to 22
2156000 11/17 to 12/17 6.1.18 20.1.18 14 1.2.18 to 13.2.18 13 to 26
206000 1/18 to 3/18 14.3.18 20.3.18 6 7.4.18 19
GoI 1192130 7/17 to 8/17 24.8.18 31.8.18 7 13.9.17 to 20.9.17 14 to 22
1342000 1/18 to 3/18 30.3.18 7.4.18 8 7.4.18 0
2018-19 GoS 2311100 4/18 to 5/18 26.5.18 12.6.18 17 22.6.18 to 6.7.18 11 to 25
2782800 6/18 to 8/18 31.8.18 13.9.18 13 6.10.18 to 14.10.18 24 to 33
69000 9/18 29.9.18 12.10.18 13 15.10.18 to 10.1.19 3 to 60
3586500 10/18 to 12/18 2.1.19 11.1.19 9 14.1.19 to 15.1.19 3 to 5
1192500 1/19 12.2.19 28.2.19 16 1.3.19 to 4.3.19 2 to 5
30000 2/19 7.2.19 14.2.19 7 14.2.19 0
854600 3/19 20.3.19 12.4.19 23 6.6.19 to 3.9.19 26 to 145
GoI 927600 9/18 6.10.18 12.10.18 6 15.10.18 to 10.1.19 4 to 90
1192500 2/19 5.3.19 30.3.19 25 6.6.19 to 3.9.19 69 to 158
337900 3/19 20.3.19 12.4.19 23 6.6.19 to 3.9.19 26 to 145
2019-20 GoS 4135200 4/19 to 7/19 30.9.19 3.10.19 3 4.10.19 to 13.3.20 2 to 162
2421000 8/19 to 9/19 1.10.19 3.10.19 2 4.10.19 to 13.3.20 2 to 162
3443800 10/19 to 3/20 12.3.20 19.3.20 7 25.3.20 to 27.3.20 7 to 9
GoI 60000 8/19 30.9.19 3.10.19 3 4.10.19 to 13.3.20 2 to 162
586800 4/19 to 7/19 1.10.19 3.10.19 2 4.10.19 to 13.3.20 2 to 162
810580 10/19 to 3/20 12.3.20 19.3.20 7 25.3.20 to 27.3.20 7 to 9

148
 Appendices

Name of the Year Source of Amount Period of pension Withdrawn Credited Delay in Actual disbursement of Delay in
Scheme funding from Cash into Bank crediting into pension from Bank A/c disbursement of
Book A/c Bank pension from
A/c(Col.6 Bank A/c (Col. 7
minus Col.7) minus Col. 9)
(in day) (in day)
Unmarried 2017-18 GoS 1476500 9/17 to 10/17 15.11.17 23.11.17 1.12.17 to 4.12.17 9 to 12
Women
Pension
1523000 11/17 to 12/17 6.1.18 20.1.18 14 1.2.18 to 12.3.18 13 to 52
2778000 1/18 to 3/18 14.3.18 20.3.18 6 4.4.18 to 7.4.18 16 to 19
2018-19 GoS 1986000 4/18 to 5/18 26.5.18 12.6.18 17 22.6.18 to 6.7.18 11 to 25
2796000 6/18 to 8/18 31.8.18 13.9.18 13 21.9.18 to 6.10.18 9 to 24
312000 9/18 6.10.18 12.10.18 6 23.10.18 to 10.1.19 12 to 90
932000 9/18 6.10.18 12.10.18 6 23.10.18 to 10.1.19 12 to 90
3720000 10/18 to 12/18 20.12.18 11.1.19 22 14.1.19 to 14.2.19 4 to 35
1240000 1/19 12.2.19 28.2.19 16 1.3.19 to 4.3.19 3 to 6
67000 2/19 to 3/19 12.2.19 28.2.19 16 1.3.19 to 4.3.19 3 to 6
14700 2/19 to 3/19 20.3.19 12.4.19 16 6.6.19 to 3.10.19 26 to 175
2019-20 GoS 156000 8/19 30.9.19 3.10.19 3 4.10.219 to 31.3.20 2 to 179
4844000 3/19 to 7/19 30.9.19 3.10.19 3 4.10.219 to 31.3.20 2 to 179
Total 108,16,13,569
(Source: CAR and Bank Statement of Axis Bank)

149
Audit Report for the year ended 31 March 2020

Appendix 6.8
Trail of disbursement to beneficiaries in respect of five branches
{Reference : Paragraph No. 6.3.8.3 (A)(iv)(a)}
2017-18
Branch Total no of Amount Date of Date of transfer Date of credit Delay in
name beneficiaries transfer from from SBS HQr to day
Axis Bank to to its branches beneficiaries (3 & 5)
SBS HQr
1 2 3 4 5 6 7
Ranipool 80 140400 5.5.17 9.5.2017 19.5.17 14
Rangpo 35 56200 15.5.2017 10
Pakyong 28 52000 15.5.2017 10
Sang 54 98300 12.5.2017 7

Branch Total no of Amount Date of transfer Date of Date of Delay in

name beneficiaries from Axis Bank transfer from credit to day
to SBS HQr SBS HQr to its beneficiaries (3 & 5)
branches
1 2 3 4 5 6 7
Ranipool 80 233000 20.9.17 22.9.2017 6.10.2017 16
Rangpo 35 95000 6.10.2017 16
Pakyong 28 95000 26.9.2017 9
Sang 54 194000 23.9.2017 3
Deorali 30 87000 5.10.2017 15
2018-19
Branch Total no of Amount Date of Date of transfer Date of credit Delay in
name beneficiaries transfer from from SBS HQr to day
Axis Bank to to its branches beneficiaries (3 & 5)
SBS HQr
1 2 3 4 5 6 7
Ranipool 80 370500 4.4.18 12.4.2018 21.4.2018 17

Branch Total no of Amount Date of Date of transfer Date of credit Delay in

name beneficiaries transfer from from SBS HQr to day
Axis Bank to to its branches beneficiaries (3 & 5)
SBS HQr
1 2 3 4 5 6 7
Ranipool 80 284900 22.6.18 27.6.2018 5.7.2018 13
Rangpo 35 100000 5.7.2018 13
Pakyong 28 141200 10.7.2018 18
Sang 54 213000 4.7.2018 12
Deorali 30 82000 5.7.2018 13
(Source: Bank statement and branch statement)

150