New Delhi: The government auditor CAG has pulled up Ministry of Consumer Affairs, Food and Public Distribution for not monitoring imports of pulses resulting in a loss of over Rs 1,200 crore to four state trading agencies.
State-owned trading agencies -- MMTC, STC, PEC and Nafed -- suffered losses of over Rs 1,201 crore on import and sale of pulses between 2006 and 2011 without succeeding in price stabilisation in the market, CAG has said.
"As against the targeted quantity of import and sale of 53.10 lakh tonnes of pulses during 2006-11, the agencies imported 30.04 lakh tonnes and sold 26.95 lakh tonnes of pulses during this period, incurring losses totalling Rs 1,201.32 crore on these transactions," the CAG said in a report presented in Parliament on Tuesday.
Interestingly, the Comptroller and Auditor General of India (CAG) found that out of the total losses of Rs 1,201.32 crore, as much as Rs 897.37 crore (75 percent) was incurred only on account of yellow peas as there were not much demand for this variety in domestic market, but imports continued.
The CAG rapped the Ministry of Consumer Affairs, Food and Public Distribution for inadequate monitoring that led to failure in ensuring the proper distribution of imported pulses in the domestic market.
"What was the demand for different kind of pulses. They (ministry of consumer affairs) had no idea. They did not conduct any survey for assessing the demand and went in for adhoc target," Deputy CAG Malashri Prasad told reporters here.
When asked which ministry was responsible for the huge losses, she quipped "consumer affairs ministry as it was the nodal ministry for the scheme". Prasad said the Ministry of Consumer Affairs failed to work out a detailed distribution strategy for the imported pulses as decided by the Committee of Secretaries.
She clarified that the losses of Rs 1,201.32 crore related to a central scheme launched in May 2006, under which these agencies were asked to import pulses on government account subject to reimbursement of losses up to 15 percent.
"The importing agencies were not able to dispose of the pulses in a timely manner, as the prices offered by the bidders were substantially lower than the import prices paid as well as the wholesale prices. These pulses were sold at substantial losses by the agencies," the CAG observed.
These agencies attributed the losses to a rise in global prices of pulses, depreciation of the Indian rupee, exchange rate fluctuation, lower sales realisation than the landed cost of pulses, sharp fall in crude oil and ocean freight charges and the global meltdown, the report said. Prasad said these reasons were correct to some extent.
Pointing out that retail prices kept increasing despite import and there were shortfall in imports as well as disposal of available quantity, she observed that the twin objectives of the scheme that is availability of pulses and stabilisation of their market price could not be achieved due to "serious deficiencies in their design, implementation and monitoring".
Prasad said the channels of distribution were restricted to only few large players and there were inordinate delays of up to 670 days in lifting of the imported pulses by bidders that pointed out towards "cartelisation and hoarding".   

"These are classic examples of how the ministry starts a scheme. They go on extending the scheme without evaluation. They do not fix responsibility for deficiency," she said.
The government need to fix accountability and assure itself that such inadequately designed proposals do not come up before the Cabinet again, the report said.