‘OMCs’ accounting process outdated, non-transparent’

The finance ministry has decided not to reimburse the losses incurred by state-run oil marketing companies (OMCs) in selling diesel, kerosene and LPG until it is satisfied that the pricing process of each product is transparent and fully understood.

At a meeting with financial advisors in all ministries, finance minister P Chidambaram conveyed that while subsidies on petroleum products, food and fertiliser would continue, there would be a strict vigil on their accounting procedure to ensure that there are no goldplating.

Singling out the calculation process of petro-products, he said that no further budgetary release towards under-recoveries would be done until his ministry was "fully satisfied" of the oil marketing companies (OMCs) accounting process, officials present at the meeting quoted him.

Without mincing words, Chidambaram said that the OMCs' accounting process was outdated and non-transparent making it incomprehensible for others and all claims would have to be explained through itemised accounts for each product.

A month after taking over as finance minister, Chidambaram ordered a scrutiny of OMCs' books to see if the under-recoveries stated by them were actual or overstated. The exercise is the third since 2008-09 when he was finance minister.

Of the Rs 43,500 crore provided for in the 2012-13 Budget, finance ministry has already released Rs 38,500 crore towards last year's under recoveries and has yet to start paying for this fiscal year.

Even after the last price hike, the losses are estimated at Rs 1.73 lakh crores for 2012-13.

Unapproved plan scheme to be rolled over to next fiscal

Another major decision by finance minister P Chidambaram was to direct the advisors that any plan scheme announced in the Budget but has not been approved by the minister until September 30, should be rolled over to the next fiscal.

"There is a need to economise on plan expenditure to the maximum extent possible due to constraints of resources and if any of the schemes has not received the approval of the competent authority before September-end, it should be carried over to the next financial year and should not operationalised during the current fiscal," he was quoted as saying.

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