NAFED to cut salary of employees by 10 pc, offer VRS

Faced with Rs 2,000 crore debt, agri-procurement agency NAFED has decided to cut salaries of employees by 10 per cent and also offer voluntary retirement to bring down the running cost.
"It was a difficult and painful decision. The Nafed Board had to take this decision, which could not be postponed any longer in view of administrative expenses being almost double the business income of the organisation," a senior official of the federation told PTI.
At present, National Agricultural Cooperative Marketing Federation (NAFED) owes around Rs 2,000 crore to banks and has negative net worth of Rs 147 crore. The federation's debt has increased due to huge losses faced after alleged financial irregularities during 2003-06.

The mounting debts have been worrying NAFED as the Agriculture Ministry has rejected the Federation's two proposals for loan restructuring submitted in 2012.
In a meeting held on December 30, 2013, the board decided to cut 10 per cent of the salary from this month, the official said.
NAFED has also sought immediate release of Rs 25 crore from the Agriculture Ministry to meet the financial requirement of the voluntary retirement scheme (VRS) that it has offered to its 500-odd employees, he added.

This move is aimed at bringing down the surplus work strength of the organisation, rendered due to halt of the commercial operations and continue with only the price support operations that it undertakes on behalf of the Centre.

Emphasising the need to restructure NAFED business, the official said the federation needs to focus more on price support scheme (PSS) or other business in order to meet its administrative expenses.
Under PSS, NAFED procures 16 commodities at minimum support price on behalf of the government.
Despite uncertainties, the federation is handling PSS efficiently. It has already made market intervention for procurement of groundnut, sunflower seed and urad this kharif season, the official said.