‘State incurred additional cost of Rs. 948.61 crore for procuring rice from Central pool’

The Comptroller and Auditor General of India on public sector undertakings has criticised the Karnataka Food and Civil Supplies Corporation and Karnataka State Warehousing Corporation for not taking any initiative to ensure compliance with the levy order in terms of rice procurement from mills since 2004-05.

The CAG report for the year ended March 2013, which was tabled in the Legislative Assembly recently, termed the collection very poor and said that the extra cost to the government on account of the failure to meet the levy rice target was high.

Procurement of the targeted quantity of levy rice would have made the State less dependent on the Central pool (Food Corporation of India) and reduced the cost of targeted public distribution system. The total quantum of mill point levy rice, which is collected for the Central public distribution system, not collected was 22.52 lakh tonnes during 2011-12 and 2012-13 and the government incurred an additional cost of Rs. 948.61 crore for procuring rice from the Central pool.

The report said that the State had sufficient foodgrains, including paddy, and it could have avoided the additional cost.

It said that 58.7 lakh tonnes of paddy was milled in 2011-12 and 56.42 lakh tonnes in 2012-13 (the assessment was based on the quantum of electricity consumed by the mills).

According to the levy order, millers are required to make available 33.33 per cent of the quantity of rice milled for levy — 13.03 lakh tonnes and 12.11 lakh tonnes in 2011-12 and 2012-13, respectively.

The State government, the report said, lowered the target for supply of levy rice to 3 lakh tonnes and 3.5 lakh tonnes for 2011-12 and 2012-13, respectively. It reduced the target for 2012-13 further to 1.5 lakh tonnes. The levy order, however, did not have a provision to reduce the targets for levy collection. The actual collection from millers during 2011-12 was only 2.03 lakh tonnes and in 2012-13, it was 59,000 tonnes.

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