MoJS asks State to return ₹36.34 cr. released under PMKSY with 7% interest

HYDERABAD

The Directorate of Monitoring and Appraisal under the Ministry of Jal Shakto (MoJS) has asked the Telangana government (Irrigation Department) to return the Central Assistance of ₹54.22 crore including interest released under Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) for nine ongoing projects.

In a letter addressed to the Engineer-in-Chief of Telangana, Director of M&A noted that the Telangana government had written to it in July 2023 for dropping the proposals submitted for 11 projects in the past and adjust the central assistance release to nine other eligible projects including Devadula Lift Irrigation Scheme, Rjiv Bhima LIS, Sriramsagar Stage-II and Paddavagu@Jagannathpur.

However, the MoJS in its letter dated December 14, 2023 made it clear that the “funds released should be utilised only for the purpose for which they were sanctioned and unutilised funds should be returned along with interest”. Further, the M&A Director pointed out that as per para-seven of memorandum of understanding, in case the State government fails to complete the projects as per timeline mentioned, the funds released be converted to loan to the State government.

Subsequently, the Director General of Audit, Chennai, has raised an audit observation for recovery of the central assistance amounting to ₹36.34 crore along with the interest accrued amounting to ₹17.88 crore up to January 2026 with an interest rate of 7% per annum. The Directorate requested the MoJS in May this year to expedite the project-wise amount to be recovered from Telangana.

In response, the MoJS suggested the Directorate earlier this month to recover the central assistance along with interest. In the audit findings attached to the letter addressed to the ENC, the Directorate mentioned that the Centre had approved 11 projects of Telangana in March 2017 with an assistance of ₹722.61 crore against the total project cost of ₹1,525.64 crore with a duration of three years.

The Centre had released ₹10.22 crore in 2017-18 and ₹26.12 crore in 2018-19 (total of ₹36.34 crore). The State government wrote to the Central Water Commission in July 2023 that since no physical progress could be achieved in any of the 11 projects due to unwillingness of farmers to give land for construction of field channels and requested to drop the projects and re-adjust the assistance released to 9 other projects and release the balance assistance of ₹146.77 crore.

The audit found that the ₹36.34 crore assistance released was not utilised even for the nine projects and it remains with the State government.