CAG blames Pawar ministry for 1000 cr losses in import of pulses-ToI-28.12.11

Consumer Affairs Ministry Favoured Private Companies, Says CAG

New Delhi: While Parliament was debating the Lokpal Bill on Tuesday, the Comptroller and Auditor General tabled a report on import of pulses that squarely blamed the consumer affairs and distribution ministry for irregularities leading to losses that could exceed Rs1,000 crore. 
    The report, audited for the period 2006 to 2011 when NCP chief Sharad Pawar was in charge of the ministry, says some large private entities were allegedly favoured during the imports. CAG says instead of the government distributing these low-cost pulses through its public distribution system, as was decided by the Cabinet, these companies were given the imported consignments through a skewed tender process. 
    These private companies, the report says, are also major players in the pulses market. They took a long time to lift the imported consignments, which ensured that prices of pulses in the domestic market remained high. The report is likely to raise another storm as the government had failed to contain the abnormal rise in prices of pulses despite huge imports. 
    “The retail prices of pulses increased at a much faster rate than the wholesale prices during 2006-11. This growing divergence between wholesale and retail prices pointed towards increasing control of the market by private traders,” says the report. 
    The CAG blames the consumer affairs ministry of not identifying distribution channels for the imported pulses to favour some private companies that were awarded the imported consignment. 
    “The importing agencies disposed of the pulses through the normal process of tendering. The tender conditions, with their high minimum bid quantities and earnest money deposits, ensured that basically large private players thus restricting the channels of distribution of imported pulses and keeping most of the smaller parties out of the loop,” it says. “The prices offered by the bidders were substantially lower than the import prices paid by the government agencies as well as the prevailing wholesale prices, pointing towards possible cartelization,” CAG points out. 
    The government resorted to import of yellow peas in 2007 on the grounds that they were a reasonably good substitute for other types of pulses. But despite the fact that the imported peas found few takers in the domestic market and the agencies had huge unsold stock balances, the government continued importing them. 
    “The outcome of these deficiencies was a huge loss of Rs 897.37 crore suffered in the import of yellow peas by the importing agencies which amounted to 75% of the total loss of Rs 1,201 crore, suffered in the process of implementation of the subsidy scheme,” the report observed.