CVC’s advice on graft has few takers

Ministries, banks overruled recommendations for action against corrupt officials

April 14, 2018 09:48 pm | Updated 09:48 pm IST - NEW DELHI

  Black deals:  The CVC says action against those who deprived the railways of revenue was diluted.

Black deals: The CVC says action against those who deprived the railways of revenue was diluted.

Ministries, public sector units and government-controlled banks overrulled actions recommended against their senior officials accused of corruption, ignoring vigilance norms, a recent Central Vigilance Commission (CVC) annual report says.

The report of the CVC for 2017 tabled in Parliament says that government institutions routinely ignore or dilute its recommendations.

The CVC observed that “during the year 2017, there were some significant deviations from the Commission’s advice.”

In some cases relating to officers coming under its jurisdiction, either the prescribed consultation mechanism with the CVC was not adhered to, or the authorities did not accept the Commission’s advice.

The departments and organisations that disregarded CVC advice included the Railways and boards administering Direct Taxes, Excise and Customs.

The report says there were “instances where the advice tendered... has been substantially diluted without approaching the Commission for reconsideration of its advice.”

The trend of ignoring vigilance processes coincides with a drop in the number of public complaints filed with the CVC. In 2017, the total number of complaints received by the Commission was just 23,609, which was less than half of what was received the previous year and lowest in five years.

The protected ones

Almost all major departments and banks overruled the CVC.

Many public sector banks turned down recommendations for action against their senior officers for alleged corruption and malpractices. Among them is Punjab National Bank, which is at the centre of the Nirav Modi scam. PNB reduced major penalty action recommended against a senior official, which could have included dismissal from service, to minor penalty.

When the CVC recommended that State Bank of Hyderabad enforce major penalty and prosecution, it declined sanction for prosecution. And instead of major penalty it issued an administrative warning to an official.

The Central Board of Direct Taxes, Central Board of Excise and Customs, Ministries of Finance, Civil Aviation, Steel and Coal are among those who rejected CVC recommendations.

Undoing a scam

The scam relating to iron ore transportation began to unravel in 2011, and by 2015 a team comprising CBI, Customs and others were investigating the methods used to to profit from the surge in global steel demand, at the cost of the Railways.

A CAG audit in 2015 said that the Railways should recover ₹29,236 crore from companies that transported iron ore at domestic rates but exported them mostly to China. Railways had introduced differentiated tariffs for iron ore in 2008—a lower rate for domestic movement, and almost four times that for exporters.

The CBI filed several FIRs in the case, and charge sheets in some. The cases are at various stages in High Courts and the Supreme Court.

The Railways, ironically, overruled the CVC’s recommendations. A senior official, who is cited as having played a crucial role in helping an errant exporter make hundreds of crores, could go scot-free.

Railways refused to implement the CVC’s advice for strict punishment, and instead served a “memorandum of counselling” to the senior Divisional Commercial Manager on August 10, 2017, the CVC says.

One firm got concessional freight rates using invalid documents and false declarations. As per the CBI report, the concerned firm caused a loss of ₹179.23 crore to Railways during the period April 2008 - March 2011.

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