SHILLONG: The failure of the State Housing department to take a final decision on the closure of the Meghalaya State Housing Board even nine years after the department had directed a proposal for the same, has resulted in an avoidable expenditure of Rs 6.02 crore during the term 2007-2012.
According to reports revealed by the Comptroller and Audit General (CAG), the unproductive expenditure on continued functioning of a defunct Housing Board had cost the State exchequer dearly to the tune of Rs 6.02 crore.
The Board had ceased its lending operations since May, 2000, but it continued its existence and utilization of the funds during 2007-2012 on administrative expenses of the Board led to the burden the public exchequer, the CAG report stated.
The Meghalaya State Housing Board was established in January, 1986 with the objective of facilitating the construction of housing accommodation in the State. However, test check of records (Feb 2012) of the Directorate of Housing revealed that the Board, during 1988-89 to 2000-01, borrowed Rs 36.56 crore from financial institutions (Rs 1.94 crore from LIC, Rs 0.60 crore from SBI and Rs 34.02 crore from HUDCO) out of which it disbursed Rs 14.43 crore between 1988-89 and 1999-2000 as housing loans to borrowers.
The Board utilized the balance of Rs 22.13 crore to repay a part of the loan taken and to meet its expenses. As the Board’s loan recovery was poor, the Housing department in May, 2000 directed the Board to stop sanctioning fresh housing loans and to trim its administrative expenditure.
In April, 2003, the department directed the Directorate to come up with a voluntary retirement scheme or a proposal for closure of the Board.
The CAG reports have revealed that over a five-year period ) from 2007-2012, the Board’s administrative expense increased by 73 per cent in contrary to the direction of the department to trim the expenses.
From a total of Rs 6.02 crore spent by the Board on administrative expenses during 2007-2012, only Rs 2.85 crore was recovered from borrowers as principal/interest or penal interest.
Interestingly, without the department’s approval, the Board irregularly utilized the entire amount of Rs 2.85 crore repaid by the borrowers during these five years to meet the expenses for pay and allowances of its staff in addition to Rs 46 lakh given as grant-in-aid to the board for meeting administrative expenses during the period.
As a guarantor of the loan, the State government paid Rs 45.70 crore to the financial institutions between October 2006 and June 2009 as full and final settlement of the outstanding loans taken by the Board.
In this connection, the matter was reported to the Principal Secretary in charge of Housing in November, 2012, the reply of which was awaited till compilation of the report in March, 2013.