In its report tabled in Parliament today, CAG said Department of Telecom’s (DoT) unit was to pay a front-loaded subsidy to telecom companies for expanding telephone connectivity in rural areas. The subsidy amount is payable at the end of the quarter in which the connection is installed and made functional. CAG said the Controller of Communication Accounts (CCA), Rajasthan Telecom circle – which is a unit of Department of Telecom – “allowed front loaded subsidy of Rs 71.49 crore on the basis of claims submitted by Tata Teleservices (TTSL) during 2008-2010, without conducting any check regarding genuineness of customer application forms before disbursement of subsidy”.

DoT had issued instructions in January 2008 to TTSL to furnish a hard/soft copy of the customer application form or CAF in support of claims for each number for which front-loaded subsidy had been sought.CAG also said that CCA units at Odisha and Kerala circles paid subsidy on duplicate claims amounting to Rs 0.82 crore to BSNL and Reliance Communication Ltd. The report also pointed to imprudent action on the part of Bharat Sanchar Nigam Ltd in procurement of ‘Digital Cross Connect System equipments’ which resulted in idling of interface cards and blocking of funds amounting to Rs 22.80 crore in two project circles.

A demand notice of Rs 137.99 crore (including interest) for the subsidy paid during 2007-08 to 2009-10 was issued to Tata Teleservices in June 2014