Apex auditor CAG has found that over Rs 700 crore worth of FCI wheat stock got "deteriorated" in Punjab till March 2016 as the grain was stored in open areas due to lack of storage facility.
The damaged wheat stock could not be supplied through the ration shops, the Comptroller and Auditor General (CAG) said in its latest report tabled in Parliament today.
The CAG has audited implementation of the scheme PEG (Private Entrepreneur Guarantee) in Punjab to create storage capacity and the way FCI managed its debt, labour and incentive payments during 2011-16.
The CAG also found state-owned Food Corporation of India (FCI) selling wheat to bulk consumers at a rate below the cost in 2013-14 leading to non-recovery of Rs 38.99 crore.
That apart, the FCI incurred excess expenditure of Rs 237.65 crore due to non-rationalisation of surplus labour and deployment of costlier labour at depots.
The FCI had made fraudulent excess payment of Rs 14.73 lakh and Rs 37.89 lakh to transport contractors on account of payment of higher rates and for bills for longer distance than actual for transportation of foodgrains, the CAG said.
On the PEG scheme, the auditor said the implementation was "negligible in the initial years and even after seven years, full capacity had not been taken over. The operation of the scheme also suffered from various lacunae".
In Punjab, 53.56 lakh tonnes of wheat stock were lying covered and plinth (CAP), kacha plinth and mandi with state government agencies and the FCI.
"4.72 lakh tonnes of wheat valuing Rs 700.30 crore got deteriorated which were declared non-issuable to the public distribution system (March 2016) as it was stored in open areas," it added.
Delay in implementation of the PEG scheme resulted in huge stock of wheat kept in open areas and such stock rose from 103.36 lakh tonnes in 2011-12 to 132.68 lakh tonnes in 2012-13, the CAG pointed out.
The audit noticed that in two districts at Sangrur and Faridkot, capacity of only 12.94 lakh tonnes was taken over under the PEG scheme even though the FCI wheat stock lying open was much higher at 14.40 lakh tonnes with a value of Rs 2,413.04 crore till June 2015.
"Despite huge quantities of wheat lying unprotected in CAP/kacha plinth, a capacity of 6 lakh tonnes was dehired by FCI during September 2012 and March 2016 in these districts. Thus, in both districts, a significant quantity was lying in CAP/kacha plinths exposed to vagaries of weather," it added.
That apart, the CAG found that ineligible bidders were awarded contracts for construction of godowns, undue benefit of Rs 21.04 crore as rent during 2012-13 to 2015-16 was passed on to private enterprises.
Handling cost of Rs 9.77 crore was incurred during 2012-13 to 2015-16 due to taking over of godowns without railway sidings and excess expenditure of Rs 8.36 crore on transportation of grains was incurred due to incorrect measurement of distance by state agency PUNGRAIN and the FCI.
On FCI labour, the CAG said the labour management practices in FCI depots were found to be "deficient with poor administrative controls" resulting in payment of "idle wages, inadmissible incentive payments" in violation of rules.
"The FCI has not been able to tackle the problem of proxy labours in its depots," it said, suggesting the agency to take action to eliminate proxy labour.
On indebtedness of the FCI, the CAG found that it was due to delayed or insufficient release of subsidy by the food ministry.
This compelled the FCI to secure external financing by incurring heavy interest burden.
FCI's interest burden was Rs 35,701.81 crore during 2011- 16. An amount of Rs 2,897.17 crore was outstanding from other ministries and state governments.
While the expenditure run up by the FCI rose by 35 per cent from Rs 1,05,355 crore to Rs 1,42,487 crore during 2011- 16, the food subsidy increased by 53 per cent from Rs 67,694 crore in 2011-12 to Rs 1,03,283 crore in 2015-16, the CAG noted.
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