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LATEST NEWS UPDATES | Pulses scam: Babus unable to explain Rs 1,200cr loss

Pulses scam: Babus unable to explain Rs 1,200cr loss

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published Published on Feb 29, 2012   modified Modified on Feb 29, 2012
-The Times of India

The government has been unable to explain why public sector firms imported pulses at a loss of 21%-30% a year from 2006 to 2011 adding up to Rs 1,200 crore, while private importers did not appear to have suffered such a misfortune.

Questioned by Parliament's Public Accounts Committee about the " pulses scam" revealed in a Comptroller and Auditor General report, senior commerce and consumer affairs officials has no answers about the discrepancy between loss-making government importers and private concerns.

About one-third of India's pulse imports are sourced by government concerns like Nafed which then tender the legumes on arrival, a process that has apparently benefitted a clutch of four to five private parties. Despite government subsidies, prices have remained high while some private interests profited.

Panel members asked commerce secretary Rahul Khullar and consumer affairs secretary Rajiv Aggarwal why the government had been hit by a double whammy having to pay subsidies while the professed objective of controlling prices and offering relief to consumers was not achieved.

"Were private importers being charitable?" in importing pulses at a loss, a committee member asked the officials. The government is finding it difficult to explain the losses it has incurred in the context of the profits made by contractors or distributors who marketed the pulses without a significant impact on the price line.

The PAC members did not question policy as importing foodgrain at a loss to the government can be seen as intended to ease market distress. Its implementation is seen to be not only tardy, but also impaired by `corruption'. The secretaries are expected to get back to the committee with more precise responses.

The Opposition has demanded an explanation for the irregularities that date to agriculture minister Sharad Pawar's stewardship of the food and public distribution ministry and the Central Bureau of Investigation has begun an inquiry.

The official auditor said the ministry failed to oversee import of pulses and that there was no well-planned strategy to ensure their efficient distribution. Instead of the government distributing low-cost imported pulses, private firms were given the imported consignments through questionable tenders.

State-owned trading agencies imported 30.04 lakh tonnes and sold 26.95 lakh tonnes of pulses and the CAG has said prices offered by bidders were substantially lower than the import prices paid. This meant that pulses were sold at substantial losses.

A loss to the tune of about Rs 900 crore was incurred on account of yellow peas that continued to be imported despite negligible demand.

The Times of India, 29 February, 2012, http://timesofindia.indiatimes.com/india/Pulses-scam-Babus-unable-to-explain-Rs-1200cr-loss/articleshow/12076427.cms


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