11 CAG reports to be tabled in Parliament today

NEW DELHI: The government will table 11 audit reports of the comptroller and auditor general ( CAG) in Parliament on Friday, including one on the performance of the special economic zones ( SEZs) and one on the hydrocarbons production sharing contracts.

Sources said the SEZ report has pointed out revenue foregone of over Rs 83,000 crore while exposing systemic weaknesses in tax administration that in many cases extended exemptions to ineligible companies operating out of these special zones.

More than 50% of the land allotted to SEZs across the country remains idle, and their very purpose was defeated with no significant increase in employment even as some firms diverted land for other purposes, violating SEZ norms. Infact, the audit is believed to have found an overall decline in manufacturing in these zones.

The auditor has calculated revenue foregone or tax concessions to SEZs for the period from 2007 to 2013 at Rs 83,104 crore on account of direct taxes and customs. This revenue foregone does not include loss to the exchequer on account of central excise and service tax that could have accrued to the government if these companies were outside the economic zones.

The audit pointed out that multiplicity of approvals needed for SEZs has meant that less than 40% of the total notified zones are operational.

A performance audit report on the hydrocarbon production sharing contracts with private operators, including Reliance Industries Ltd's KG D-6 basin, is also likely to be tabled.

In the production sharing contracts, auditor has covered the four-year period between 2008 and 2012 and looked into financial and propriety aspects of the operators' transactions during the period. CAG had earlier carried out a similar audit in 2011.

The auditor is believed to have quantified losses to the exchequer due to shortfall in production and overstatement of cost while reviewing RIL's $5.76 billion expenditure in development of wells.

There are four reports on railways, one on direct taxes on allowance of depreciation and amortization, one on DTH services by department of space among the 11 CAG reports to be tabled.