National

CAG exposes scam in rice procurement

Irregularities in procurement and milling caused a loss of at least Rs.50,000 crore over the past five years.

Motorcycles, autorickshaws, jeeps and even handcarts were shown on paper to have transported paddy and processed rice weighing between 14 and 1,800 quintals, in States such as Punjab, Uttar Pradesh, Bihar and Chhattisgarh, according to a report by the Comptroller and Auditor-General of India (CAG).



In Punjab, 97 per cent of the 3,319 registration numbers of vehicles mentioned as used for transportation did not match the State transport authority’s computerised database. Of the 88 traceable vehicles, 15 were found to be other than trucks — buses, cars, motorcycles and tankers.



The report has highlighted massive irregularities in the procurement and milling of paddy for the central pool of the public distribution system that resulted in a loss of at least Rs. 50,000 crore over the past five years.



The government paid Rs.17,985 crore without confirming if the farmers received the full payment. The CAG has, therefore, recommended direct payment to farmers. In addition, these irregularities resulted in further losses on account of government subsidies of Rs.22,000 crore. The CAG has recommended a thorough probe into all doubtful cases of transportation of paddy. It has also suggested investigation to ascertain the actual quantum of loss to the exchequer, which would be much higher.



The first-of-its-kind audit was undertaken amid complaints by RTI activist Gouri Shankar Jain alleging massive corruption by unscrupulous mill owners with the connivance of government servants. In March, The Hindu had reported extensively on the issue.



In by-products too



The report highlights that though the Centre had not revised milling charges since 2005, mill owners has not raised any such demand, even though the actual cost of milling had increased substantially, the report says. The owners were making unaccounted money by selling rice by-products: rice bran, broken rice and husk.



Interestingly, The CAG was unable to gather all relevant details to complete the audit into the production and sale of rice by-products by millers. The study is based on reports from certain districts of Andhra Pradesh, Chhattisgarh, Telangana and Uttar Pradesh, quantifying an extra income of Rs.3,743 crore by the millers. It covered on 15 per cent of total paddy procurement in the country.



The CAG has asked the Centre to take up the matter with the States to ensure that mill owners share data with the Tariff Commission for fixing of milling charges.



The report revealed that Chhattisgarh procured paddy worth Rs.21,115.13 crore without property quality check, whereas Punjab purchased substandard paddy worth Rs.9,789 crore. Also, in Punjab, Rs.163.72 crore was paid as transportation expenses to undeserving millers.



Safety standards ignored



The Punjab government did not recover penal interest from the millers for delayed delivery of rice, resulting in an undue benefit of Rs.159.47 crore to them. Also, 1.84 lakh metric tonne of two-year-old rice was released in Haryana and Punjab without checking food safety standards.



In select districts of Bihar, Haryana, Odisha, Punjab, Uttar Pradesh and Telangana, paddy worth Rs. 3,042.87 crore and rice worth Rs.4,527.91 crore was not delivered by the millers to the Food Corporation of India (FCI) and State agencies. Therefore, the government has been asked to make a provision for collateral security.



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Printable version | Feb 29, 2020 7:37:29 AM | https://www.thehindu.com/news/national/cag-exposes-scam-in-rice-procurement/article7962409.ece

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