Sikkim power dept remits only Rs 1,488 cr of Rs 3,400 cr revenue: CAG report

The Comptroller and Auditor General (CAG) of India has raised concerns over revenue management and energy policies in Sikkim, flagging significant financial irregularities in the Power Department of Sikkim (PDS). 

The findings are part of the State Finances Audit Report for the period 2017-18 to 2021-22.

According to the report, PDS earned Rs 3,410.08 crore in revenue during the period, but only Rs 1,488.92 crore (44 per cent) was remitted to the government account. The remaining amount was allegedly utilised without legislative approval, violating Article 266(1) of the Constitution.

The report further highlights that royalty revenue from Independent Power Producers (IPPs), meant for the Consolidated Fund of the State (CFS), was diverted for other expenditures, including loan repayments. 

Moreover, Rs 92.27 crore remained unaccounted due to non-maintenance of proper books.

Energy management inefficiencies were also noted. Despite Sikkim being a leading hydropower producer with an installed capacity of 2,295 MW, the state failed to recover Rs 6.55 crore in outstanding electricity dues from defunct companies. 

The report also pointed out undue benefits extended to private entities like Sikkim Manipal University and industrial firms, leading to significant revenue losses.

The CAG recommended that the Sikkim government must improve financial transparency, ensure all royalty revenues are deposited in the CFS and reassess its energy requirements to prevent surplus power losses.