In its first major audit of spending on food by the UPA government, the Comptroller and Auditor General (CAG) in a report to Parliament cited Rs 1,201-crore loss in the import of pulses under two schemes since 2006, both failing to stabilise prices due to a possible cartelisation.
The audit report on the schemes launched in 2006 and 2008, when Sharad Pawar was food minister, could resonate in Parliament on Tuesday, at a time when the government grapples with the lokpal legislation.
The biggest reason for the losses accrued from importing lentils (yellow peas) that are not usually consumed by Indians. This alone resulted in losses of Rs 897 crore or 75% of the total losses of Rs 1,201 crore.
The government decided to import yellow peas despite unused stocks, the CAG said. But food ministry officials said the lentils were imported at a time of the global food crisis, when varieties consumed by Indians were simply not available. This prompted the government to import the next suitable variety.
Despite being mandated by the import schemes, there was no survey to assess the exact demand. The lentils are imported by four state agencies that trade in food: MMTC, STC, NAFED and PEC.
Two major private players - Pyarilal Export Import and Prime Impex Ltd - were engaged to contract bulk of the imports on behalf of the state agencies, which is the usual practice, but they also acted as buyers of the commodities, pointing to a conflict of interest.
High bidding quantities and fees meant only large players -- in all four -- were eligible, thereby eliminating small private players who play an important role.
Poor distribution and delay in moving stocks, amid high inflation, indicated possible hoarding, deputy comptroller and auditor general Malashri Prasad said.
India has to rely on imports to meet its annual domestic requirement of pulses, which went up due to a wide-spread drought in three decades in 2009.