20.11.91 *t04



Alleged Misappropriation of DDA





Will the Minister of URBAN DEVELOPMENT be pleased to state: (a) whether the investigation into the alleged misappropriation of funds of the Delhi Development Authority amounting to Rs. 20 crores allocated for developmental work of East Delhi has since been com- pleted;

7 Oral answers

(b) if so, the details thereof; and

(c) if not, the reasons therefor?



M. ARUNACHALAM): (a) to (c) A number of complaints have been received from Members of Parliament and from others alleging irregularities relating to award of contracts and payments in the works of East Delhi. The allegations are being examined by DDA and their detailed report is awaited.

SHRI. SHRAVAN KUMAR PATEL: Sir, I would like to know from the Government whether it is a fact that the allegations of several MPs, including the charge regarding payment of crores of rupees for the award of earth filling contracts which never took place.

May I know whether the Government will refer the case to the CBI as demanded by the MPs.

SHRI M. ARUNACHALAM: Sir, we have sent it to the DDA for its comments. After receipt of the comments, we will definitely send it to the CBI.

SHRI SHRAVAN KUMAR PATEL:While going round different parts of Delhi, especially the Eastern side of Delhi, one gets an impression of total disorder with encroachment of all types coming up, especially of DDA lands, in parks, in open spaces and even on road sides revealing corruption, afflicting the very roots and structure of administration of DDA in direct proportion to these encroachments.

Sir, may I know what steps are being taken to study and probe this aspect through a Parliamentary Committee in order to get rid of the corruption rampant in the administration of DDA by way of re- organisation and so on.

SHRI M. ARUNACHALAM: Sir, our Ministry had exclusive discussion with the

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hon. Members of Parliament from Delhi. Regarding the encroachment part, we need a separate notice. It does not relate to this question.


SHRI. MADAN LAL KHURANA: Mr. Speaker, I had sent that complaint which is mentioned in this question. There have been in all three types of bungling in D.D.A. which relate to construction of roads, lifting of earth and drainage system. Firstly, no work was executed and still payment was made; the work was done on paper only and the payment was taken. Secondly, the work which had already been done and the payment for which had already been made, were shown as done now and the payment was claimed. The third misappropriation is that the figures of work done were exaggerated and payment was made on that basis whereas for less work was actually done. For example, suppose the 100 yard long road was constructed but payment was made for 500 yards. I am to say that these charges relate to Eastern Delhi only.

Mr. Speaker, Sir, there are 8000 houses in Delhi constructed after spending crores of rupees have been lying vacant for the last many years due to lack of provision of electricity and water. These are yet to be allotted. Is the Government contemplating to get this mat- ter and other cases of misappropriations of funds in D.D.A.

investigated in the C.B.I., Parliamentary Committee or by some High Power Committee?


SHRI M. ARUNACHALAM: The hon. Member had raised the same issue when we had a meeting with the Delhi Members of Parliament. We have referred it to the DDA for its comments. As soon as we get their comments, we will definitely go into them and refer it to CBI.

SHRI HARI KISHORE SINGH: When was this letter sent to the DDA for its comments? What is the distance between the DDA Headquarters and the Urban Develop-

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ment Ministry? The Lok Sabha sends two representatives on the Advisory Committee of the DDA. I happen to be one of the Members.

But no meeting has been convened of this Advisory Committee by the DDA so far. I understand that the Advisory Committee meeting never takes place. Perhaps Mr. Madan Lal Khurana would enlighten us about it. I would like to know when was this letter sent and by whom and when it was received and how long the Government expects the DDA to reply?

Will there be a reply or not?

SHRI M. ARUNACHALAM: There are two letters: one from 11 hon.

Members of this House addressed to the Prime Minister and another letter addressed directly to the Commissioner of Vigilance. We had received information day before yesterday only.(Interruptions) SHRI HARI KISHORE SINGH: From whom? When was this letter sent?


SHRI M. ARUNACHALAM: A letter signed by 11 Members of Parliament addressed to the Prime Minister was received by the Ministry only day before yesterday. (Interruptions)

SHRI HARI. KISHORE SINGH: No, no; it is wrong (Interruptions) SHRI M. ARUNACHALAM: We have referred it to the DDA for its comments.


SHRI. CHANDULAL CHANDRAKAR: Mr. Speaker, Sir, it has been said in the reply to the question that the allegations are being examined by D.D.A.. Couldn't there have been any other means for it because it is sent to the same organisation against whom enquiry is to be made.

It means that it is to be investigated by someone, who himself is guilty. If it would have been sent for enquiry by some other agency then it would have been a healthy precedent. Therefore, I would like to know from the honourable Minister

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whether the Government propose to got it enquired through some other agency.

SHRI. M. ARUNACHALAM: The DDA has its own Vigilance Wing headed by an IAS Officer. We are awaiting for its comments; after we get the comments, we will refer them to the appropriate authority.

Allocation to States


(a) whether some States have expressed their fear about reduced allocations from the total divisible pool of Central resources; (b) if so,whether it is due to modification of the Gadgil Formula of 1980, and

(c) the remedial steps proposed to be taken by the Government?



(a) and (c): The allocation of Central resources for States Plan during Seventh Plan was made according the criteria laid down in the modified Gadgil formula approved by the National Development Council in August, 1980. In the context of Eighth Plan, 1990-95. revisions in the modified Gadgil formula were made by the NDC in October, 1990 and the formula was called as 'consensus' formula. Keeping in view the concerns shown by several States with regard to NDC 'Consensus' formula, the Planning Commission has set up a Committee under the Chairmanship of the Deputy Chairman, with the Union Finance Minister and a Member of the Planning commission as Members, to examine the circumstances

11 Oral Answers Oral Answers 12

which necessitated revision of modified Gadgil formula by the NDC in October,1990, concerns shown by several States on the revisions(consensus formula) and to suggest a formula most appropriate for allocation of Central assistance during Eighth Plan, 1992-97.

Revision of the above formula keeping in view the suggestions of the Committee, will be considered by the NDC of which Chief Ministers are members. After the total divisible pool is finalised, the allocations as per the revisions/formula approved by NDC will be made for States Eighth Plan, 1992-97. A copy of the constitution of the above committee is attached as Annexure.


No. 17/3/91-FR

Government of India

Planning Commission

(Financial Resources Division)

Yojana Bhavan,

Sansad Marg,

New Delhi - 110001.

Dated the 24th September, 1991.


Subject: Constitution of a Committee regarding the allocation of Central Assistance for state Plans

It has been decided to set up a Committee to examine the various formulae that have been suggested for allocation of Central Assistance and to recommend for the consideration of the National Development Council the most appropriate one for the allocation of Central Assistance for State Plans during the Eighth Plan, 1992-97.

2. The Composition of the Committee will be as follows:

1. Shri. Pranab Mukherjee Chairman

Deputy Chairman, Planning Commission.

2. Dr. Manmohan Singh Member

Minister of Finance.

3. Dr. C. Rangarajan Member Member, Planning Commission.

3. The terms of reference of the Committee are:

(1) to examine the circumstances in which certain changes were considered necessary in relation to the Gadgil (Modified) Formula and an alternative was considered by the National Development Council in its meeting held in October, 1990;

(2) to go into the concerns expressed. by the Chief Ministers of States regarding the Gadgil (Modified) Formula and the 'consensus' formula; and

(3) to suggest a formula which is the most appropriate for allocation of Central Assistance for State Plans 13 Oral Answers

during the Eighth Plan, 1992-97.

4. The committee will submit its report within a month from its constitution.

5. The Financial Resources Division of the Planning commission will function as the Secretariat to the Committee.



Director (Administration)

SHRI. VIJAY NAVAL PATIL; The Report of this Committee was to be made available with in a month. I would like to know from the hon.

Minister whether the report of this Committee has come or whether the committee is still considering its various aspects and the Report is not finalised. I would also like to know whether MPs will be given special opportunities to express their views before this Committee.

SHRI. H.R. BHARDWAJ: In pursuance of requests from the various States, the Mukherjee committee went into the question of removing grievances from the various States. And so far as my information goes, the job of the committee is almost over; and we are preparing for the next meeting of the National Development Council. It the hon.

Members want to discuss any aspect of the terms of reference of this Committee, they are most welcome. I will request the hon. Members that whenever they want to discuss it, they can either discuss it they can either discuss it with the Deputy Chairman or any Member of the Planning Commission.

SHRI. VIJAY NAVAL PATIL: On the one hand, we give grants to the States; on the other hand, we ask the help of the States. for example, in the case of Konkan Railway and Thanebelapur Railway, indirectly some contribution is asked for from the States by way of grants or contribution. Is this also included in the terms of reference before the committee?

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SHRI. H.R. BHARDWAJ: There is no specific project in the terms of reference and if the hon. Member wants to know what the terms of reference are, I may refer him to the terms of reference attached to the reply. But there is no specific project as such.

SHRI. RAM KAPSE: The Committee has not yet submitted its report and on Page 2 of the reply, the Minister has said:

"Revision of the above formula keeping in view the suggestions of the committee will be considered by the NDC of which the Chief Ministers are Members. After the total divisible pool is finalised the allocation as per the revisions/formula approved by the NDC will be made for the States' Plan 1992-97".

1st January, 1992 is very near. When do you expect the Committee to submit its report and when do you expect to go through all these formalities so that it will be convenient for the Annual Plan of 1992 to be started?

SHRI. H.R. BHARDWAJ: I submit that the Committee has almost completed its work and the NDC is perhaps going to meet some time in December 1991 and I do not think that there is any delay, because we have to see that there was no Plan for the last two years. This Government came in June 1991 and within this time we have covered a lot of distance left by the earlier Governments. So I think that there is no delay and as I submitted, the NDC is the most appropriate forum where the decisions are taken. And we want to accommodate all the honourable Chief Ministers because I have pending with me several suggestion from the States on the so-called Consensus Formula. You will appreciate that the Consensus Formula has still not been accepted by the States and they have made certain suggestions in 1990. Those suggestion are pending and the committee has gone into them and they have made some attempt to improve upon it and satisfy most of the States. So I think when the NDC mets every issue will be discussed.

The hon.Prime Minister is the chairman and the Chief Min-

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isters; will be there and the whole gamut of the problems faced by the States will be discussed there.

SHRI. K.P. SINGH DEO: In view of the Ministers reply that the NDC; is the appropriate forum I would like to say that the Chief Ministers who have been Members of the NDC, particularly in 1990, those who were a party to the decision known as the Consensus Formula as enumerated by the States have been crying for economic independence from the Union Government, particularly the State of Orissa, which has got no say in both the Modified Godgil Formula and the Consensus Formula. I would like to know whether this Committee has gone into this aspect because of the disappointment among the States and as the State of Orissa wants economic independence from the Union Government.

Therefore, the Consensus Formula has not been fair to the backward States as also the Modified Gadgil Formula. What is the Government of India's stand on this?

SHRI H.R. BHARDWAJ: I do not understand the meaning of economic independence. I understand one thing. The financial cake which the country possesses should be distributed equitably among the States on certain principles which guide the whole nation and Orissa is given its due share and if the hon. Member wants I have the suggestions received from Orissa-I am confident that those suggestions will be given due consideration. But every State, including Orissa, right from Andhra Pradesh, Maharashtra and Rajasthan, every State has prob- lems but the financial cake is limited and the question is how far you can distribute it equitably, That is We consensus needed.

SHRI SOMNATH CHATTERJEE: The Minister has himself admitted that it was a so-called Consensus Formula'. He has used that language himself. Therefore a formula or a decision taken by the Government was imposed on the States without their acceptance, without their agreement and which resulted in serious financial difficulties being faced by most of the States and I am sure

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that most of the States have objected to the adoption of the so-called Consensus Formula. What is the Committee going to do? How are the arbitrary reductions that have been made going to be restored? How is it going to be restored? Every State is feeling the crunch. A Committee has been set up and that has already exceeded its time limit. It should have submitted its report by November. It is not going to be done. The N.D.C. is going to meet in the last week of December. From the first of January, the Plan is going to commence.

Is there any time for the states even to consider it? When will you give an opportunity to the Members of Parliament to make their suggestions? I want to Know as to why no arrangement is being made to look into the grievances of the states and make allocations to them till the matter is finally decided. I want to know as to how the Government is going to help the States. Every State is in difficulty.

SHRI H.R. BHARDWAJ: Sir, with regard to the consensus formula, I would like to draw the attention of the hon. Members to the fact that immediately after the meeting of the N.D.C. the States protested and said: "This is not a very good arrangement". And the then Prime Minister, Shri.V.P. Singh said: "We will have one more round with every State and if any state is facing any problem, we will take cognisance of it". Then, suggestions were received in the Planning Commission and they were listed and each State's problem has now been taken up by the committee. You must give credit to the Planning commission that within a short period, they have listed out those suggestions and analysed them. And in the N. D.C. Meeting, those will again be discussed with the honourable Chief Ministers. When you formulate a Plan, the Chief Ministers is the proper person to be consulted with because it is their Plan...(Interruptions). We are in touch with them. You may kindly recollect what the Deputy Chairman spoke recently in Hyderabad. He gave the guidelines, which are almost the crux of the report, which he has prepared. There is nothing secret. We can discuss it with the hon. Member it he is interested... (interruptions)

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SHRI. SOMNATH CHATTERJEE: Not a single vital issue has been replied. Is this Question Hour you want to televise?.. (Inter- ruptions)

SHRI. CHANDRA JEET YADAV: Sir, the Minister is time and again referring about the meeting of the National Development Council . Many important policy decisions are being taken and some of the discussions have very serious repercussions on our economic sovereignty even. My information is that because of the pre-occupation of the Prime Minister, the dates for the meeting of the National Development Council have not yet been finalised and the Chief Ministers are pressing for that meeting. And even the Committee report has not been submitted. When will the Chief Ministers give their I acts to be included in the Agenda, which is going the discussed in the meeting?