CAG report exposes major irregularities in Odisha government departments up to 2024, including uncollected fines of Rs 640 crore and a Rs 975 crore mining case
Sept 2026 : Several serious irregularities related to the functioning of different departments of the Odisha government, use of government funds, land, mining, roads, education, irrigation and other schemes have come to light. These cases have been mentioned in the Compliance Audit Report of the Comptroller and Auditor General of India (CAG). The report pertains to March 31, 2024.
The report includes cases that came to light during test-check audits in 2023-24, as well as cases from earlier years that could not be included in previous reports. The report examined matters related to the Fisheries and Animal Resources Development, Forest, Environment and Climate Change, Steel and Mines, Water Resources and Works departments.
An audit of six Gram Panchayats in Bargarh and Dhenkanal found that nine solar water supply projects constructed between 2019 and 2021 at a cost of around Rs 43.30 lakh were lying defunct. Due to the closure of these projects, around 28,820 people were deprived of drinking water facilities.
Unauthorised occupation of assets worth Rs 2.59 crore
Cases of unauthorised occupation were also found in 25 assets constructed in one Panchayat Samiti and 17 Gram Panchayats of Bargarh and Dhenkanal. These included three market complexes and 22 Kalyan Mandaps. They were constructed at a cost of around Rs 2.59 crore. According to the audit, local Panchayati Raj institutions suffered potential revenue loss from the use of these assets.
Complete scope not defined for 35 projects worth Rs 3.73 crore
In nine Panchayat Samitis and 10 Gram Panchayats in Bargarh, Dhenkanal, Khurda and Nabarangpur, 35 projects costing Rs 3.73 crore were undertaken. The audit found that the complete scope of these works had not been included in advance. As a result, the allocated funds were exhausted before completion.
In Dhenkanal district, Rs 1.39 crore of CFC grants were also used for works that were considered inadmissible in the report. These included construction of office buildings, purchase of electronic items and organisation of cultural programmes.
Rs 3.30 crore worth of works undertaken without tenders
In Bargarh, Dhenkanal, Khurda and Nabarangpur, 14 works worth Rs 3.30 crore were undertaken in two Panchayat Samitis and eight Gram Panchayats without inviting tenders. According to the report, the cost of each work was more than Rs 10 lakh, in cases where the tender process was required.
Rs 77.80 lakh pension amount unauthorisedly retained
In the case of Nimapara Panchayat Samiti, 21 Panchayat Samiti officials and 26 Gram Panchayat officials allegedly retained, without authorisation, an undisbursed pension amount of Rs 77.80 lakh meant for beneficiaries between 2017 and 2020.
Illegal occupation of government land
Under Odisha's Land Acquisition, Rehabilitation and Resettlement Rules, there is a provision for preparing village-wise land banks. The report said that in the absence of such land banks, 668.893 acres of government land, valued at around Rs 597.87 crore, remained under unauthorised occupation.
Agricultural land used for non-agricultural purposes
An examination of 24 sample tehsils found that 504.768 acres of agricultural land had been used for non-agricultural activities. These included educational institutions, industries and religious organisations.
Forest land used without Centre's approval
In six sample tehsils, 568.876 acres of forest land was used for non-forest activities, although prior permission from the Central Government was required. The report also recorded a case in which 13.65 acres of land falling within a wildlife sanctuary area was divided into 156 plots and sold. According to the audit, provisions of wildlife protection laws were ignored.
Irregularities related to contractors and maintenance under PM Gram Sadak Yojana
The Government of India had launched the Pradhan Mantri Gram Sadak Yojana to provide all-weather road connectivity in rural areas. PMGSY-III was later launched in 2019 to improve existing rural roads and connectivity routes.
The compliance audit covering 2019 to 2024 found several deficiencies. According to the report, some works were awarded to ineligible contractors. In addition, liquidated damages amounting to Rs 40.55 crore were not recovered in 127 works. In 30 projects, the absence of regular maintenance resulted in avoidable expenditure of Rs 23.02 crore.
Several irregularities in the Education Department
The audit mentioned several cases related to education. In the case of Badachana Women's Higher Secondary School, Rs 57.95 lakh was spent from HSTP funds. According to the audit, it was a private educational institution offering Classes 11 and 12 and was not eligible for HSTP assistance.
Suspected embezzlement of Rs 12.48 lakh at Cuttack school
Suspected misappropriation of around Rs 12.48 lakh from HSTP and Mo School Abhiyan funds was found at Ranihat High School in Cuttack.
Suspected payment of Rs 30 lakh at Nandipur High School
A sum of Rs 30 lakh was transferred through a cheque from the bank account of Nandipur High School in Dasarathpur block to a third-party bank account. According to the audit, the amount was supposed to be transferred to the account of the Block Development Officer, Dasarathpur. The payment was therefore considered suspicious.
Suspected payment of Rs 4.95 lakh in Jaleswar
A case of suspected payment of Rs 4.95 lakh by the BDO of Jaleswar, shown as expenditure for repairing dual desks, also came to light.
Rs 7.39 crore loss due to duplicate purchase of e-content
In Jajpur district, lack of coordination between OSEPA and the district administration resulted in e-content being purchased from two sources. As a result, expenditure of Rs 7.39 crore for 430 schools became wasteful because similar material was purchased from both OSEPA and M/s EDCIL.
Smart classes and science labs in poor condition in 54 schools
The audit found several facilities defunct in 54 schools, including smart classrooms, science laboratories and internet facilities. Some science laboratories did not have water or gas connections. Essential equipment and chemicals were also unavailable.
Questions raised over use of government aircraft and helicopter
The use of the Odisha government's aircraft and helicopter from April 2019 to March 2024 was examined. According to the audit, the process of selecting private agency M/s OSS Air Management Private Limited to provide aircraft services was not transparent. The government proceeded with only one bidder and did not obtain the most competitive market rate. Despite this, the agency's contract was extended from time to time and continued until August 2024.
Rs 6.91 crore spent on chartered aircraft
Between January 2019 and November 2023, the state government hired chartered aircraft on 22 occasions for long-distance inter-state travel. Around Rs 6.91 crore was spent on these services. According to the audit, during the same period, 751.34 flying hours of aircraft already hired remained unused.
Rs 1.30 crore spent on helicopter
The government obtained helicopter services from the same private agency on 29 occasions, using 100.90 flying hours, and paid around Rs 1.30 crore. The report said that 566.44 unused flying hours of aircraft already hired were available at the time.
Construction works worth Rs 28.84 crore in protected areas
Permanent or semi-permanent construction works, including the beach-front promenade at Ramchandi, widening of the approach road to the Puri-Konark Marine Drive and a Panthanivas at Talsari, were undertaken in sanctuary, national park and PRF areas. Rs 28.84 crore was spent on these works.
According to the audit, these works were undertaken in violation of government instructions and provisions of the Forest Conservation Act, 1980.
20 Panthanivas operating without fire safety certificates
Hotels, lodges and guest houses are required to comply with prescribed fire safety regulations. The audit found that 20 Panthanivas were operating without mandatory fire safety certificates.
Rs 640.87 crore in motor vehicle fines not recovered
Major deficiencies were also found in motor vehicle-related cases. According to the report, in several cases, a single vehicle had committed more than one violation. However, while issuing challans, enforcement officials recorded only one or two violations instead of all violations. As a result, potential fines of around Rs 640.87 crore could not be recovered.
Serious deficiencies in irrigation projects
Several cases were also found during the examination of minor irrigation projects under the Water Resources Department. Adequate surveys, investigations and feasibility studies were not carried out while preparing the projects.
As a result, seven minor irrigation projects had to be closed because land acquisition and forest clearances were unavailable. Of the 40 projects approved under RIDF-XXIV, three projects failed to achieve the targeted cultivable command area. Meanwhile, 271, or 87 per cent, of 311 project proposals did not receive approval from the High-Power Committee.
38 irrigation projects started without approvals
A total of 38 minor irrigation projects were awarded without land acquisition and forest clearances. Headworks and distribution systems could not be completed in these projects, resulting in wasteful expenditure of Rs 91.57 crore.
Rs 4.26 crore spent on rebuilding old check dams
Under the Chief Minister Adibandh Tiyari Yojana, superintending engineers of four divisions entered into seven agreements for construction of check dams. Between April 2023 and January 2025, Rs 4.26 crore was spent on these works.
The audit examined the projects using geospatial data from Google Earth Pro and geo-tags provided by the concerned departments. It found that check dams already existed at the locations where agreements had been made to construct new check dams. The report said the possibility of fraudulent payment of Rs 4.26 crore could not be ruled out.
Crores of irregularities in mining sector
In some mining cases, production was carried out without the required permissions. A total of 79,535 metric tonnes of minerals were produced without obtaining consent to operate from the Odisha State Pollution Control Board. This resulted in recoverable dues of around Rs 45.59 crore.
At the Kanther-Koira manganese mine, 10,066 metric tonnes of minerals were also produced without consent to operate, resulting in recoverable dues of Rs 3.24 crore.
Rs 975.57 crore liability in coal production
In one case, a total of 11,796,540 metric tonnes of coal was produced from two mines. According to the audit, in one case production exceeded the limit prescribed under environmental clearance, while in the other case production was carried out without environmental clearance.
On this basis, Rs 975.57 crore was payable by the concerned leaseholder as the value of the minerals.
Several questions over use of DMF funds
District Mineral Foundations (DMFs) have been established to work for people and areas affected by mining. Between 2015-16 and 2023-24, six DMFs collected Rs 22,568.17 crore as contributions and interest. During the same period, 17,435 projects were approved from DMF funds at a cost of Rs 20,947.52 crore.
However, according to the audit, none of these six DMFs had prepared a perspective plan and master plan.
No endowment fund for affected people
The six DMFs received Rs 20,795.51 crore in contributions and Rs 1,772.66 crore in interest. Despite this, none of the DMFs created an endowment fund to provide long-term employment or livelihood support to affected people.
757 projects in Keonjhar DMF without approval
In the Keonjhar DMF, Rs 9,733.37 crore was approved for 3,269 projects during 2015-24. Of these, 757 projects, or around 23 per cent, were implemented without approval from the Executive Committee or Board of Trustees.
In Sundargarh DMF too, five projects worth Rs 102.71 crore were approved without the required approvals.
Rs 679.14 crore worth of projects outside rules
In the Jajpur, Dhenkanal, Keonjhar, Nabarangpur and Sundargarh DMFs, 317 projects worth Rs 679.14 crore were approved outside the prescribed norms of PMKKKY. These projects were approved between 2018-19 and 2023-24.
Rs 136.77 crore spent on hockey stadium in Sundargarh
The Sundargarh DMF spent Rs 136.77 crore from DMF funds on construction of a hockey stadium. According to the audit, the project was not among the activities permitted under PMKKKY guidelines. Therefore, the expenditure was termed irregular.
24 medical officers without valid certificates
A total of 78 medical officers were deployed under the mobile medical van service of Sundargarh DMF. Of these, 54 doctors submitted registration certificates, while 24 doctors were deployed without valid certificates.
The agency was paid Rs 7.44 crore as salaries for these doctors, which the audit termed irregular.
Rs 145.06 crore paid to private hospitals
Three DMFs availed the services of private hospitals for treatment of Covid-affected patients and paid Rs 145.06 crore. According to the audit, there was no provision under the PPP model for hiring beds in private hospitals.
Despite this, payments were made for permanently reserving beds in hospitals. The audit termed the expenditure of Rs 145.06 crore irregular.
The report as a whole makes it clear that the audit found several cases related to government schemes and use of public funds where rules were not followed or government resources were not used as expected. These included defunct drinking water projects, occupation of government land, works undertaken without tenders, unauthorised retention of pension funds, suspected payments involving education funds, inadequate approvals for irrigation projects, mining without required permissions, use of DMF funds outside prescribed norms, and expenditure on government aircraft and helicopters.
