New Delhi: Lack of due financial diligence in selection of pharma projects by the Department of Science and Technology (DST) and loans released to unsound companies which later defaulted on their repayment has led to a loss of Rs 73.68 crore to the exchequer, the CAG has found.
The Comptroller and Auditor General also said that non- receipt of final project completion reports and consequent lack of information on outcomes generated from the projects also led to a loss and the objectives of enhancing the capabilities of Indian pharmaceutical industry and promoting them to develop new drugs at lower costs were “not achieved”.
Drugs and Pharmaceutical Research Programme was implemented with an objective to develop capabilities in the Pharma R&D sector by synergising the strengths of Indian pharma industry and research institutions for developing new drugs at lower costs for poorer sections of society.
In 19 projects covered in the audit, DST released soft loan of Rs 95.27 crore to private firms.
The audit report, which has been submitted in Parliament, found that in none of the 19 projects were the outcomes known to DST as the project-completion reports were not submitted by industry partners.
“Due financial diligence in selection of projects was not done by DST and loans were released to financially unsound companies which later defaulted in repayment of loans. An amount of Rs 63.34 crore pertaining to principal amount of loans and interest was due from industrial partners of nine projects as of March 31, 2014.
“In addition, penal interest amounting to Rs 10.34 crore was due from industrial partners of 12 projects. In spite of project monitoring mechanism prescribed under the programme, monitoring of projects during implementation and after completion of project duration was lax.
“As a result, final completion reports were not received in any of the 19 projects, due to which DST had no information on the outcome generated from the projects,” the report said.
Thus, after investing Rs 95.27 crore in 19 projects, the purpose of the programme to build capabilities, develop drugs and provide the same at low cost was not realised, the report added. PR KKM