CAG flays FCI for over Rs 2,000-crore losses
By Ravi Shanker Kapoor
The Comptroller & Auditor General (CAG) has criticized Food Corporation of India (FCI) for incurring unnecessary expenditure running into thousands of crores of rupees. FCI did not avail Long-Term Tariff Contract policy for its movement of food grains through railways. Had it done so, it could have availed the rebate of Rs1,736.11 crore on the amount of freight paid during 2017-18 to 2021-22 besides priority in rake allotment, the CAG said in its recent report called ‘Storage Management and Movement of Food grains by Food Corporation of India.’
Due to the short dispatch of 84.253 and 43.99 lakh metric tonnes (considering the quantity of 2,600 tonnes in one rake) in Punjab and Haryana, respectively, FCI had to bear storage charges of Rs182.29 crore, the CAG report said. In absence of any formal guidelines or instructions from the government or the FCI headquarters, the direct issue of food grains from railhead(s) could not be done except in a few stray cases. Even a 10 per cent direct issue of food grains from railheads to State government godowns would have resulted in savings of Rs158.88 crore during 2017-18 to 2021-22 in the Jharkhand region, the CAG report said.
The national auditor pointed out many other lapses on the part of FCI which resulted in higher costs. The CAG has recommended the government to aim at completing the augmentation of storage facilities envisaged under the National Policy on Handling, Storage and Transport of food grains. The government should make efforts to rationalize the structure of statutory and non-statutory charges imposed by different state governments with a view to reduce acquisition cost of food grains, it added. FCI, in consultation with the government, should make a cost-benefit analysis to augment its own storage facilities up to the level of minimum stock level prescribed as per stocking norms. It should avoid using cover & plinth (CAP) and open storage, the CAG said.
FCI should analyze the causes of underutilization of its food storage depots (FSDs) and only resort to hiring after maximum utilization of its own godowns. It should take immediate steps to construct modern storage facilities at the places where old concrete silos are lying unutilized for five to 35 years. FCI should fix responsibility for the losses and excess expenditure due to ineffective storage management, the CAG said. It should also ensure compliance of the stipulated food safety standards with regard to quality parameters prescribed. It should prepare an effective movement plan so that stock can be moved timely to the recipient states. FCI should pre-empt impediments in planned movement and proactively engage with Railways so that the problem of shortfall in rakes can be addressed effectively, the CAG report said.
This article has been republished from The BizBuzz.