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State agencies recorded a loss of Rs 1,201.32 crore from 2006 to 2011 due to serious deficiencies in the design, implementation and monitoring of schemes for import of pulses, according to the CAG report tabled in Parliament on Tuesday.
To bridge the demand-supply gap of 10-50 lakh tonnes (lt) during 2002-03, the Government introduced two schemes for import and distribution of pulses through four agencies — NAFED, MMTC, PEC and STC.
In the first scheme, the agencies were to import pulses on Government account, subject to reimbursement of losses, if any, up to 15 per cent of the landed cost by the Government.
The CAG in its audit found that the Ministry of Consumer Affairs, Food and Public Distribution did not conduct any survey for assessing the demand for the different types of pulses.
Against the targeted quantity of import and sale of 53.10 lt of pulses during 2006-11, the agencies imported 30.04 lt and sold 26.95 lt, incurring losses of Rs 1,201.32 crore.
Yellow peas
Without taking into consideration the food patterns, the Government in 2007 imported yellow peas.
When the peas found no takers, they were sold after prolonged delays, at very low rates, with heavy losses to the importing agencies. The MoCA and F&PD decided in 2008 that the agencies need not go for further contracts of yellow peas, but the Union Cabinet in 2009 decided to allow the agencies to import these.
The agencies continued to import even when they had huge unsold stocks, resulting in a loss of Rs 897.37 crore, 75 per cent of the total loss of Rs 1,201.32 crore. This decision was reversed only in 2010-11.
The delay in clearance of pulses at ports also led to avoidable expenditure of Rs 42.71 crore up to March 2011. The tender conditions ensured that large private buyers could submit bids while keeping most small parties out. Around 73 per cent of 8.38 lt of pulses was sold to just four large buyers.
“This points to cartelisation and hoarding,” said a CAG official.
The second scheme introduced in 2008, to import 4 lt of pulses with a subsidy of Rs 400 crore and preferential distribution to BPL households through the public distribution system at an overall subsidy of Rs 10 a kg also suffered from deficiencies, CAG said.
Against the target of 4 lt during 2008-09, only 0.12 tonnes of pulses were imported and 0.09 lt distributed. The subsidy element of a meagre Rs 10 a kg would keep the prices of pulses very high for BPL families and could thus result in diversion to non-BPL households as well to the open markets.
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