SRINAGAR: The Comptroller and Auditor General (CAG) has flagged significant shortcomings in the implementation of the Transport Subsidy Scheme in Jammu and Kashmir, pointing to limited uptake, procedural violations and weak monitoring that undermined the scheme’s core objective of phasing out old, polluting public transport vehicles.
Launched in November 2019, the scheme was designed to incentivise private transporters to replace buses older than 15 years with new, fuel-efficient vehicles compliant with BS-IV and higher emission norms. Each eligible vehicle owner was entitled to a subsidy of Rs five lakh, subject to conditions including scrapping of the old vehicle and mandatory operation of the new vehicle on designated routes for five years. The scheme was re-notified in December 2022 with additional safeguards such as a five-year non-transfer clause.
However, audit findings reveal that the scheme failed to generate meaningful participation. Despite advertisements issued in 2019 and 2022, the response from bus owners remained extremely poor at just 0.56 per cent. The CAG noted that the Transport Department did not expand the scheme’s scope to include mini-buses and matadors, despite these segments forming a substantial part of the public transport fleet. No reasons for this exclusion were recorded or furnished during audit.
The lack of participation was particularly stark in Kashmir division, where no applications had been received as of February 2025. In contrast, limited implementation was observed in Jammu division, where 45 vehicles were replaced and subsidies amounting to Rs 2.25 crore were disbursed.
The audit also pointed to multiple violations of scheme guidelines in the processing and approval of beneficiaries. Affidavits submitted by all 45 beneficiaries in Jammu were attested by notaries instead of First-Class Magistrates, as mandated. Further, no six-monthly compliance reports were prepared to verify whether subsidised vehicles were operating on designated routes, raising concerns over post-disbursement monitoring.
In several cases, essential safeguards to ensure scrapping of old vehicles were bypassed. Inspection certificates from the Board of Inspection, which are required to confirm destruction of vehicle chassis, were missing in seven cases, yet subsidies of Rs 35 lakh were released. In addition, three beneficiaries purchased new vehicles in the name of third parties, in violation of scheme norms.
Financial irregularities were also observed in the disbursement process. In eight cases, subsidy amounts totalling Rs 40 lakh were credited directly to beneficiaries’ savings accounts instead of being routed through loan accounts linked to vehicle purchase, increasing the risk of fund diversion. The department attributed this to time constraints and pressure from transporters, but the audit held that due diligence was not exercised.
The CAG further highlighted systemic issues in monitoring and governance. A Policy Review Committee, envisaged to periodically assess the scheme and recommend corrective measures, had not been constituted as of March 2023. Similarly, while four meetings of the Technical Committee were held over more than three years, no prescribed frequency existed, limiting its effectiveness.
Critically, the audit found that the department failed to enforce the phasing out of old vehicles. Despite recommendations from the Pollution Control Board and earlier proposals to ban vehicles older than 15 years, the department issued orders in 2022 permitting registration of vehicles aged between 15 and 20 years, contradicting the scheme’s objectives.
The findings indicate that the scheme largely relied on voluntary participation without regulatory backing, resulting in negligible impact on reducing vehicular pollution or modernising the public transport fleet.
The CAG concluded that the Transport Department was unable to effectively implement the scheme or ensure compliance with its provisions, with multiple irregularities and weak oversight diluting its intended outcomes.
