Audit Findings: A Deep Dive into Digital Governance
Summary of Report No. 1 of 2025 by the Comptroller and Auditor General (CAG) of India
This article presents a concise summary of the key findings from Report No. 1 of 2025, recently released by the Comptroller and Auditor General (CAG) of India. The report uncovers significant financial and operational discrepancies within the Ministry of Electronics and Information Technology (MeitY) and the Ministry of Communications (MoC). Focusing on the fiscal year 2022–23, this comprehensive audit reveals systemic inefficiencies and financial mismanagement that have led to notable losses and governance concerns.
Ministry of Electronics and Information Technology (MeitY)
National Knowledge Network (NKN) Project
- Lack of Financial Planning: The project lacked a clear plan for financial sustainability.
- Connectivity Gaps: The North-East region missed out on triple connectivity, essential for network resilience.
- MoU Shortcomings: Of the 1,757 institutions onboarded, only 1,158 had proper agreements. Many agreements didn’t include clauses for asset loss compensation.
- Policy Enforcement Issues: The IP Address Usage Policy was not consistently enforced, risking security.
- Financial Mismanagement: Incorrect service rates led to an excess payment of ₹1.69 crore. Delays in decommissioning obsolete links wasted another ₹1.01 crore.
Modified Special Incentives Package Scheme (M-SIPS)
- Narrow Focus: Incentives were approved mainly for 4 out of 24 electronics product categories.
- Delayed Processes: Appraisal delays ranged from 52 to 1,075 days.
- Ineligible Expenditures: Claims included ineligible capital expenses worth ₹8.89 crore.
- Monitoring Deficiencies: The M-SIPS portal had inaccurate data and lacked proper monitoring.
Department of Posts (DoP)
- GST Non-Recovery: ₹13.57 crore in GST was not recovered under the BNPL scheme.
- TDS Lapses: Outdated software caused TDS of ₹3.65 crore to be missed on interest payments.
- Irregular Promotions: Staff promotions were made without following proper recruitment rules.
Department of Telecommunications (DoT)
- Revenue Under-Assessment: Spectrum Usage Charges were misapplied, under-assessing revenue by ₹151.22 crore.
- Forex Gains Ignored: Foreign exchange gains weren’t included in Adjusted Gross Revenue, causing a short levy of ₹39.07 crore.
- Bank Guarantee Mismanagement: ₹309.77 crore in bank guarantees were adjusted improperly.
- Uncharged Spectrum Fees: One-time charges of ₹1,058.38 crore were not levied in some cases.
- Non-Recovery from PSUs: MTNL under-reported revenue, leading to unrecovered dues of ₹2,312.45 crore.
Public Sector Undertakings (PSUs) under MoC
Bharat Sanchar Nigam Limited (BSNL)
- Under-Billing: Failure to enforce tariff clauses led to revenue loss of ₹1,757.76 crore.
- Idle Assets: Mismanagement left cables worth ₹5.43 crore unused.
- License Fee Oversight: Not deducting license fees caused a ₹1.39 crore loss.
- GST Input Credit Loss: Missed GST input claims led to a ₹5.43 crore loss.
- Unrealized Dues: ₹4.80 crore remained unpaid by vendors, along with potential interest losses of ₹2.31 crore.
ITI Limited
- Project Mismanagement: Violations in procurement guidelines caused losses of ₹28.93 crore and blocked funds of ₹6.93 crore.
Certification Audit Results
- Financial Misstatements: ITI Ltd., MTNL, and BSNL were found to have understated expenses and overstated assets, reflecting poor financial reporting.
Recommendations
- Strengthen Oversight: Improve monitoring systems to ensure compliance.
- Enhance Transparency: Ensure timely and accurate financial reporting.
- Policy Enforcement: Rigorously implement policies and agreements to prevent future irregularities.
- Capacity Building: Invest in staff training and system upgrades to avoid technical and financial issues.
Conclusion
This audit is a clear call to action. The findings highlight the urgent need for accountability, transparency, and reform within India’s digital governance framework. Addressing these systemic flaws is critical to protecting public resources and rebuilding trust in government institutions.
Note: This article is a summarized interpretation of the official report published by the Comptroller and Auditor General of India titled “Compliance Audit on Finance and Communication, Union Government”.
For the full report, visit Comptroller and Auditor General of India.
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