Failure to get paddy milled on time led to Rs 1,432cr loss:CAG

The Comptroller and Auditor General of India (CAG) has said that the Punjab State Civil Supplies Corporation failed to get paddy milled within stipulated times which resulted into a financial loss of Rs 1,432.28 crore.
In its latest report on Public Sector Undertakings, the government auditor said as against 98.09 lakh tonnes of deliverable rice during crop years 2008-2013, millers delivered only 95.76 lakh tonnes, leaving a deficit of 2.33 lakh tonnes.
During crop years 2008-13, the weighted average period of delivery of rice was 18 months for 2008-09, 17 months for 2009-10 and 2010-11 and 9 months for 2011-12 and 7 months for 2012-13.

Though weighted average period decreased from 18 months in 2008-09 to 7 months in 2012-13, yet it was very much higher than weighted average period of 2 months allowed by the government of India, said the report.
The stipulated dates for rice delivery was March 2009 for 2008-09, March 2010 (2009-10), March 2011 (2010-11), June 2012 (2011-12) and March 2013 (2012-13).
The percentage of undelivered rice increased from 0.44 per cent in 2008-09 to 4.10 per cent in 2012-13.

"Thus the failure of company to get the paddy milled within stipulated period resulted in loss of interest, custody and maintenance charges of Rs 1,432.28 crore during 2008-13, reflecting extremely poor efficiency," said the report.

Under Custom Milling Policy of state government, rice millers are supposed to deliver custom milled rice to FCI within stipulated time.
However, the management of Punjab State Civil Supplies Corporation admitted that best efforts were made to recover due rice from millers within stipulated time.
Finding reply of management not convincing, the CAG said up to 2007-08, in case of failure of millers to adhere to schedules, there was a provision of payment of penal interest at the rate of 12 per cent of the cost of short delivery of rice.
When the state government dispensed with this clause during 2008-09 and 2010-11 and did not incorporate clause in 2010-11, the company should have taken up the matter with the state government for making a provision of compensation in lieu of waiver of interest for extended period, CAG said.

The company also did not recover penal interest from millers for delayed milling of paddy during 2009-10 and 2012-13 in spite of provision of penal interest in custom milling policy of those years, it said.