Moneylife Impact: 10 Years after the Delhi HC Order, CAG to Do Regular Audit of NDDB
Moneylife Digital Team 07 December 2021
The comptroller & auditor general (CAG) has finally audited the National Dairy Plan (Phase-I) implemented by the National Dairy Development Board (NDDB), despite the long and stiff resistance put up by the latter. To put things in perspective, the CAG audit has been pending for ten years, even after the Delhi High Court had issued a clear order a decade ago. 
In a written reply in the Rajya Sabha, Parshottam Rupala, minister for fisheries, animal husbandry and dairying, says, “The CAG has undertaken the audit of national dairy plan phase I (NDP I) which was implemented by NDDB through a network of end implementation agencies (EIA). CAG provided a draft para on wasteful expenditure for one of the sub-projects on pilot doorstep artificial insemination (AI) delivery services. Pointwise clarification has been provided to CAG by this department in consultation with NDDB.”
Further, the minister informed the upper house that his ministry had requested the department of economic affairs (DEA) to issue the necessary directions to CAG for getting the accounts of NDDB audited. “The HC of Delhi in its judgment dated 27 January 2010 has accepted the position of the government that the CAG can audit the accounts of NDDB under section 14(2) of the CAG Act. Accordingly, this department has requested CAG for auditing the accounts of NDDB vide letter dated 13 March 2020.”
Professor Manoj Kumar Jha, a member of Parliament (MP) from Rajya Sabha, has asked about the audit of NDP by CAG and if the auditor general is also auditing NDDB. 
NDP Phase 1 is a central sector scheme for the period of 2011-12 to 2018-19. NDP Phase 1 was implemented with a total investment of about Rs2,242 crore comprising Rs1,584 crore as International Development Association (IDA) credit, Rs176 crore as the government of India share, Rs282 crore as share of end implementing agencies (EIAs) that carried out the projects in participating states and Rs200 crore by NDDB and its subsidiaries for providing technical and implementation support to the project. “Funding will be through a line of credit from the IDA, which, along with the share of the government of India, will flow from the department of animal husbandry, dairying and fisheries DADF to NDDB and in turn to eligible EIAs,” says NDDB on its portal.
As Moneylife have been pointing out, while an audit of the National Dairy Plan had begun last year, NDDB itself and its subsidiaries continued to escape CAG scrutiny by using one strategy or the other. In fact, this resistance has been on for well over a decade.  
Consequently, NDDB’s subsidiaries also escaped scrutiny despite the many controversies and questions over the use or misuse of funds that have been reported by Moneylife over the past year or more (see list at the bottom of this article). 
Last year in May 2020, someone sent a detailed complaint to the CAG alleging major corruption and the need for a comprehensive audit for the board and its subsidiaries.
On 27 January 2010, justice Sanjiv Khanna from Delhi HC had passed an order stating, “The World Bank disbursed and made funds available to the central government and thereafter grants were made by the central government from the Consolidated Funds of India (CFI) to the petitioner (NDDB). The immediate source of the funds was the CFI though funds may have originated from and could be traced to the World Bank. As per the tripartite agreement accepted by the NDDB, the funds or grants had come and were made available from the CFI. These loans or grants were under section 24 of the NDDB Act. In these circumstances, Section 14 (2) of the CAG Act would be applicable if the total amount of grant from the loan from the CFI exceeded Rs1 crore. Admitted position is that total disbursements made to NDDB from the CFI exceeded Rs1 crore.”
During the hearing, CAG had submitted a letter stating that no useful purpose would be served in auditing old accounts for the period 1987 to 1994 at that stage, and therefore, it was not interested in the said audit.
On 28 December 2018, the union ministry of agriculture and farmers’ welfare had conceded that CAG could audit NDDB but had not done so.
Last year in June, Prof Jha had also asked whether the government’s Dairy Infrastructure Development Fund, with an outlay of more than Rs8,000 crore being implemented by NDDB since 2016, was also being duly audited by CAG. 
In response, Krishna Raj, the then minister of state agriculture and farmers welfare, had stated, “Government vide letter dated 18 December 2018 has requested CAG to consider auditing of the accounts of NDDB in the National Dairy Plan (Phase-I) after the closure of the scheme in November 2019.”
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