The Ordnance Factory Board has been exaggerating its performance while failing to meet production targets, a Comptroller and Auditor-General (CAG) audit has said, flagging the challenges to government efforts to overhaul ordnance factories.
“Our audit in 10 factories showed a persistent trend of overstatement of performance in the form of advance issue of vouchers. Factories raise ‘advance issue vouchers’ to demand payment from the Army without physical issue of the stores,” the CAG said its report on ordnance factories, covering the period 2011-14, tabled in Parliament last week.
The result, the CAG said, was that both the stores and manufacturing expenditure, which together accounted for 83 per cent of the total revenue expenditure, increased during 2013-14 by five per cent, despite a dip in production in the year.
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This is not the first time the issue of advanced vouchers has come to light. Taking cognizance of the risks involved, the Controller-General of Defence Accounts (CGDA) in New Delhi had in October 2007 instructed all Controllers of Finance and Accounts not to accept advance vouchers without dispatch particulars. Yet, the practice persisted during 2013-14 with the incidence being particularly high in the ordnance factory at Badmal, Itarsi; the clothing factory at Shahjahanpur; and the parachute factory in Kanpur.
“Similar findings were reported in our compliance audit when issues were reported on items which had not even been produced,” the report said.
The report stated that despite persistent audit observations, neither the Ordnance Factory Board nor the Principal Controller of Factories, Kolkata, took steps to curb the incorrect practice.
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Another issue found in the audit is that of a steep decline in the achievement of targets by the Ordnance Factory Board, despite a fall in the assigned workload. “Despite the decline of 30 per cent in assigned workload, the factories continued to fall short of targets, with only 57 per cent achievement in 2013-14,” the report said.
To give momentum to the ‘Make in India’ initiative, Defence Minister Manohar Parrikar earlier this year set an ambitious target of Rs. 20,000 crore in annual turnover for the Ordnance Factory Board in the next three years. On another occasion, touching on ammunition shortage, he said the Board had seen an increase in the level of production by 18 per cent.