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CM tests norms with 5-year club cash plan

Calcutta, Jan. 11: Chief minister Mamata Banerjee today distributed Rs 40.09 crore to 2,395 clubs and promised to keep the funds flowing for five years, which changes the complexion of the expenditure and tests auditing norms.

“I will keep giving you money for five years, after which I will review,” Mamata said at a sports department programme at Netaji Indoor Stadium this afternoon.

The handout and the promise ahead of the panchayat polls drew a huge round of applause from over 4,000 members of the beneficiary clubs.

Sources in the finance department said that this year’s disbursal was routed through the plan head of the sports department. But the process to release funds under the plan head was flouted to make room for populist politics ahead of the panchayat polls.

“The entire process of fund disbursement is flawed and it is unlikely to pass any auditor’s scrutiny,” said a senior state government official.

During today’s programme — held as part of celebrating 150 years of Swami Vivekananda — the chief minister distributed Rs 2 lakh each to 1,614 clubs and Rs 1 lakh each to 781 clubs, which had received Rs 2 lakh each a year ago.

According to the officer, the decision to spend money earmarked for planned expenditure and committing a regular flow for the next five years without laying down any condition on the usage was a violation of fiscal discipline.

“Besides, the finance department should carry out a pre-disbursal audit to assess the need in case of releasing funds under the plan head of the consolidated account of the state government…. That has not been done in this case,” he added.

In its consolidated account, the state government maintains all the funds at its disposal, which get spent either through the plan or non-plan head. (See chart)

A finance department official said that the government was well within its rights to distribute the funds under the plan head. But the problem cropped up the moment the chief minister committed that she would continue giving out this dole for five years as this means that she is spelling out details of the plan budget even before the budgets are tabled, he explained.

“The promise of flow of funds for the next five years may mean that the clubs would be incurring maintenance expenditure. In that case, the natural question would be why the government is spending money from the plan head to fund expenses that are non-plan in nature,” added the official.

According to him, the standard checks and balances before distributing “public money” were thrown out of the window as most of the beneficiary clubs were not registered entities. The fact that only a minuscule proportion of the beneficiary clubs — which received the funds last year as well — had submitted utilisation certificates was another indication of the government’s disregard for established norms.

“Many of you are not registered, please get registered within the next three months,” said the chief minister.

Some economists The Telegraph spoke to expressed “surprise” over the manner a cash-strapped government — reeling under a debt burden of over Rs 2.2 lakh crore — was spending money.

“The fiscal situation will only worsen if the government continues with these populist measures. The Punjab government landed itself in a crisis-like situation by pursuing such policies, like giving free power to farmers and waiving various types of user charges. Bengal seems to be heading towards that direction,” said a senior economist with a Delhi-based research outfit.

Releasing funds to clubs is not new in Bengal as the Left government started this practice with the objective of winning over the youths in the state.

“But there was a method as the government never gave money to any unregistered club and the funds were released in tranches after going through utilisation certificates. Besides, the allocation was always in the range of Rs 3 crore to Rs 5 crore,” said an old-timer in the state finance department.

Sources in the finance department said that some officers were reluctant to approve the disbursal of Rs 40.09 crore under the “improvement of games and sports” head of plan expenditure for the sports department as the annual allotment was pegged at only Rs 14.53 crore.

“The objections were, however, overruled as the chief minister intervened and we had to give it a go-ahead by curtailing funds for other planned expenditure of the sports and youth services department,” said an officer.

According to him, the government seems to have taken the decision of distributing money to clubs long ago as the plan expenditure for sports was raised from Rs 46.18 crore in 2011-12 to Rs 90.01 crore in the present financial year.

Plan budgets for key departments like urban development, panchayat and rural development, however, decreased by Rs 297 crore and Rs 255 crore respectively this year in comparison to last year.

“The beneficiary clubs have been short-listed on the basis of recommendation of MLAs, without considering their involvement in sporting activities,” said a sports department official.

The fact that achieving sporting excellence was not on the chief minister’s mind was apparent in her speech as she rolled out the deliverables for the members of the clubs.

“Stand up in resistance to the canards and misinformation by a section of the media, this I expect of you,” said the chief minister.

The mandate from Mamata bared it all, said leader of the Opposition Surjya Kanta Mishra. “This largesse from the government is irregular to the core and the only thing that the chief minister is trying to achieve through this is political muscle to save her government,” said Mishra.