Calculation of internal rate of return/ economic rate of return and benefit-cost ratio in DPRs was not based on reliable data.
NABARD sanctions loans for construction of rural roads on the basis of internal rate of return (IRR)/ economic rate of return (ERR) and benefit-cost ratio (BCR) as per economic details/ parameters provided by the EEs in the DPRs.
Audit noticed that calculation of IRR/ ERR and BCR in DPRs of 269 projects in 17 test-checked divisions was not based on reliable data. Rather than obtaining reliable/ official data from the departments concerned, the divisions of the public works were using approximated/ self-assessed figures which had no reliable basis. As verified from the economic details in the DPRs, in 39 (out of 269) DPRs in five (out of 17) test-checked divisions, the economic details provided in the DPRs were unrealistic. In 32 (out of 269) projects of five test-checked divisions, the calculation of details was wrong. Records of Gram Panchayats concerned in respect of three roads showed that the actual population of the villages did not match with the population shown in the DPRs.
Incorrect depiction of IRR in the DPRs indicated that the IRR calculation had been made merely to meet the requirement of NABARD for obtaining sanction and the benefits derived after completion of the road would not be assessed. Besides, the Department/ NABARD had not carried out any post-completion evaluation study to assess the benefits derived from the NABARD projects during 2013-18.
In the exit conference, the ACS accepted the facts and stated that the matter would be examined. However, wrong/ unrealistic data furnished by the divisions was overlooked at the E-in-C level while finalization of DPRs for onward submission to NABARD.
The cases pointed out are based on the test check conducted by Audit. The Department may initiate action to examine similar cases and take necessary corrective action.