//Civil Supplies Corp suffered Rs 90-crore loss: Report

Civil Supplies Corp suffered Rs 90-crore loss: Report

Tuesday February 14 2006 11:18 IST

THIRUVANANTHAPURAM: The Kerala State Civil Supplies Corporation (KSCSC) has suffered a loss of around Rs 90 crore mainly owing to the procurement of commodities at higher rates and selling them at prices far below the market price.

This was revealed by the report of the Comptroller and Auditor General (CAG) for the year, which ended on March 31, 2005. The report was tabled in the Assembly on Monday.

According to the CAG’s report, “The Corporation, which was started with the objective of making available food grain and other essential commodities to the public at reasonable prices, had failed in fulfilling the objectives as the prices of commodities supplied were far higher than the market prices.”

CAG’s report revealed the following:

* The grant obtained from the government to subsidize essential commodities was passed on to a few local traders in the form of exorbitant procurement prices.

* The quality parameters were generally relaxed and infested commodities were accepted.

* The selling prices, being higher than or equal to open market prices, made the company’s products unattractive leading to losses.

* Pulses and spices were purchased at rates higher than open market rates resulting in extra expenditure of Rs 42.04 crore.

* Sugar was purchased far in excess of the requirement and was sold at lower rates resulting in a loss of Rs 5.75 crore.

* Transportation of commodities to primary depots and subsequent retransfer to secondary depots resulted in avoidable expenditure of Rs 2.97 crore.

* The Maveli sale prices were fixed far below the open market retail price, which resulted in a loss of Rs 42.73 crore.

* There were flaws in the computerisation that led to financial losses.

It may be recalled that the Government had asked an inquiry commission to probe the alleged irregularities and mismanagement in the corporations last year. The inquiry is going on. A Vigilance inquiry in this regard is also in progress.

The CAG report also suggests a set of measures to streamline the functioning of the Corporation.