Gangtok: The Comptroller and Auditor General (CAG) of India has raised serious concerns over revenue mismanagement and energy policies in Sikkim, uncovering significant financial irregularities within the Power Department of Sikkim (PDS). The findings, detailed in the State Finances Audit Report for 2017-18 to 2021-22, highlight discrepancies in revenue remittance, misuse of state funds, and inefficiencies in power sector management.
According to the audit, the PDS generated revenue of ₹3,410.08 crore over the five-year period, but only ₹1,488.92 crore (44%) was remitted to the state government account. The remaining funds were utilized without legislative approval, violating Article 266(1) of the Constitution, which mandates that government revenues must be credited to the Consolidated Fund of the State (CFS) before allocation.
Further scrutiny revealed that royalty payments from Independent Power Producers (IPPs), which should have been deposited in the CFS, were instead diverted for loan repayments and other expenditures. Additionally, ₹92.27 crore remained unaccounted due to poor bookkeeping and lack of financial oversight.
Despite Sikkim’s reputation as a leading hydropower producer with an installed capacity of 2,295 MW, the state struggled with energy management inefficiencies. The report noted that the state failed to recover ₹6.55 crore in outstanding electricity dues from defunct companies, adding to its financial burdens.
Moreover, the audit flagged undue benefits extended to private entities, including Sikkim Manipal University and several industrial firms, leading to significant revenue losses for the state. The preferential treatment in electricity tariffs and billing further contributed to financial discrepancies.
In its recommendations, the CAG urged the Sikkim government to improve financial transparency, ensure that all royalty revenues are deposited in the CFS, and reassess its energy management policies to prevent surplus power losses. The report emphasized the need for stricter financial accountability and legislative oversight to prevent further financial mismanagement in the state’s power sector.