Patna: The Comptroller and Auditor General (CAG) has censured six public sector undertakings of the Bihar government for doling out gifts like wrist-watches, mobile phones, cameras and briefcases worth over Rs 2 crore to legislators, senior officers, journalists and other people between 2014 and 2016.

"Six government companies incurred an avoidable expenditure of Rs 2.06 crore on purchase of gift items and distributed the same to MLAs/MLCs, press reporters, senior officers and other dignitaries. The expenditure was not in furtherance of the objectives of the companies and thus violated the canons of financial propriety," the CAG audit report on PSUs for the year ending March 31, 2017, said.

The six PSUs, as per the report, which was tabled in the Legislative Assembly on Tuesday, are Bihar Rajya Pul Nirman Nigam Limited (BRPNNL), Bihar State Beverages Corporation Limited (BSBCL), Bihar State Road Development Corporation (BSRDC), Bihar Urban Infrastructure Development Corporation (Buidco), Bihar State Educational Infrastructure Development Corporation (BSEIDC), and Bihar State Textbook Publishing Corporation Limited (BSTPC).

Of these, Buidco and BRPNNL were the biggest spenders. Buidco gifted mobile phones and briefcases worth Rs 56.44 lakh, while BRPNNL gave away wrist-watches and mobile phones valued at Rs 51.60 lakh.

In gifting luxury items, BSEIDC and BSTPC took the cake. Each of them gifted 175 wrist-watches worth Rs 10,000 per piece to the people they chose to. BSEIDC handed out 175 cameras, each costing around Rs 11,000.

Though most of these companies have shown a profit as per the report, sources said doling out such expensive items was poor financial practice. In 2016, chief minister Nitish Kumar had directed that such practices should stop and most government departments and corporations had followed suit.

The CAG report said the scrutiny of records revealed that the six companies purchased the gift items as per the resolutions passed by their board of directors.

"The management of one company - BSBCL - replied that the expenditure on gift items was incurred by the company on the direction of the department and was duly approved by the board of directors," the CAG report said.

The CAG asserted that the reply was not acceptable as "the expenditure violated the canons of financial propriety, and was not in furtherance of the objectives of the company".

As per the CAG report, BSBCL had earned a net profit of Rs 93.44 crore for 2014-15. It took a hit in its operations, turnover and profits after Bihar implemented total prohibition on April 5, 2016. Its accounts for 2015-16 have not been mentioned in the report.

BSEIDC reported a net profit of Rs 23 crore, BRPNNL Rs 108 crore, while Buidco earned a net profit of Rs 6.16 crore.

A senior official told The Telegraph on the condition of anonymity that gifts had to be given to keep those in power happy. "Everybody knew that such a practice was unprofessional, but the companies indulged in it," the official said.