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FCI incurred avoidable expenditure of Rs 376 crore in 2006-12: CAG report

FCI incurred avoidable expenditure of Rs 376 crore in 2006-12: CAG report
The Food Corporation of India (FCI) had incurred an unwanted expenditure of around Rs 376 crore between 2006-07 and 2011-12 because it failed to utilize the vacant storage space available in Punjab and Haryana after procurement got over, the Comptroller and Auditor General of India (CAG) said on Tuesday.

The CAG report which was tabled in Parliament today also said that 1.06 lakh metric tonnes of foodgrains worth around Rs 121.93 crore was damaged during between 2006-07 and 2011-12 as FCI did not strictly follow the principle of first-in-first-out for foodgrains, meaning grains procured first should be sold first.

It said the Corporation’s carryover charges paid to the state government’s  rose from Rs 175 crore in 2006-07 to Rs. 1,635 crore in 2011-12 because of holding of food grains beyond the prescribed time frame. CAG also said that an analysis of the storage capacity of FCI revealed serious imbalances with a concentration of capacity in a few states like Punjab, Haryana, Andhra Pradesh, Uttar Pradesh and Chhattisgarh.

‘As on 31 March 2012 while Punjab had a storage capacity of 2116 days, Himachal Pradesh, Assam and Jammu and Kashmir had a capacity of 13, 35 and 36 days respectively,’ the report said.

On the minimum buffer stock norms, the CAG said it was ‘ambiguous’ as it did not clearly delineate individual elements of food security  for example  emergency, price stabilization, food security reserve, Targeted Public Distribution System (TPDS) and Other Welfare Schemes (OWS)] within the minimum buffer stock.

As per FCI, as on 1 April, the country should have a minimum of 21. 2 million tonnes of foodgrains in its warehouses of which 16.2 million tonnes is buffer stocks, while 3 million tonnes for strategic reserve.

CAG said that the average foodgrains procurement at 514 lakh metric tonnes by FCI, state government agencies, states undertaking decentralised procurement between 2006-07 to 2011-12 was lower than the average allocation of 593 lakh metric tonnes made by the Government of India to states for distribution under PDS.

‘Procurement at this level would not be able to adequately meet the allocation and the future requirement of foodgrains estimated by the government,’ CAG said.


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