CAG on Tuesday alleged irregularities to the tune of a staggering Rs 40,564 crore in procurement and milling of paddy meant for subsidised public distribution system (PDS).
Lapses that have been pointed out in the CAG report, tabled in Parliament today, include payment of nearly Rs 18,000 crore as support price to paddy farmers without authentication as also undue benefits to the rice millers.
The Comptroller and Auditor General of India (CAG) sought revisiting the existing procurement and milling plans and suggested the government should transfer minimum support price to accounts of farmers directly.
Official auditor CAG has pointed out nine major cases of irregularities, all of which put together add up to Rs 40,564.14 crore.
CAG said Rs 3,743 crore worth of benefit was passed on to millers by not including the value of by-products in the price they have to pay for milling paddy, a charge the government refuted saying the rate paid includes value of by-products like rice husks and rice brans.
The government said a Traffic Commission has been asked to study the milling cost and value of by-products and suggest a new rate by December, based on which the government will be deciding on revising the milling charges that have not been revised since 2005.
“Delay in revising the milling charges and poor control over custody of paddy/rice resulted in not only undue gains to the rice millers but also widespread and large scale non-delivery of paddy and rice by them,” CAG said in a report ‘Procurement and Milling of Paddy for the Central Pool’ tabled in Parliament on Tuesday.
Citing some major audit findings, CAG said: “Despite significant increase in realisation value of by-products, milling charges have not been revised since 2005. This resulted in excess net realisation of Rs 3,743 crore from sale of by-products by millers in Andhra Pradesh, Chhattisgarh, Telangana and Uttar Pradesh during 2009-10 to 2013-14.”
The auditor said the actual figure of excess realisation would be much higher for across the country, it said.
In another audit finding, CAG said, “A large number of deficiencies like non-authentication of land holdings of farmers, cases of payments to farmers with doubtful identity, non-obtaining MSP certificates, non-availability of details of farmers (bank account number, name of village etc.) were noticed in the states of Andhra Pradesh, Haryana, Punjab, Telangana and Uttar Pradesh,” CAG said.
“The amount of such MSP payments made was Rs 17,985.49 crore for which there was no assurance that farmers actually did get full MSP for their produce from millers /state government agencies (SGAs)/FCI in these states,” it added.
Citing instance of large scale non-delivery of rice by millers, CAG said it noticed in the selected districts of Bihar, Haryana, Odisha, Punjab, Uttar Pradesh and Telangana that 15.89 lakh tonnes paddy and custom milled rice valuing Rs 3,042.87 crore and 23.34 lakh tonnes of levy rice valuing Rs 4,527.91 crore (totalling Rs 7,570.78 crore) was not delivered by millers to FCI/SGAs.
In absence of collateral security from millers, CAG said SGAs/FCI had no recourse to recover the value of non-delivered CMR, it added.