Audit finds lapses in defence canteen operations
Friday, August 13, 2010 7:00:53 PM by IANS
New Delhi, Aug 13 (IANS) India’s audit watchdog has found lapses in financial and business operations and the pricing and quality of goods of the Canteen Stores Department (CSD) that sells household products at cheaper than market rates to armed forces personnel and their families.
The report of the Comptroller and Auditor General (CAG) of India, tabled in the Lok Sabha Friday, says the 3,600 unit-run canteens (URCs), or retail outlets, of the CSD across the country have been kept out of the “purview of parliamentary financial oversight as they are considered to be regimental institutions”.
This despite the fact that these URCs get soft loans and quantitative discounts through the CSD from the Consolidated Fund of India, it says.
“Neither the budget documents nor the proforma accounts of CSD reflect the operations of the (URCs) that are also not subject to the accountability regime for operations funded by the Consolidated Fund of India,” the report says.
The CAG said it was denied access to the URC records by the Army Headquarters in Delhi “in spite of repeated requests”.
The matter was taken up at the level of the defence minister too but to no avail.
In the interest of transparency, the operational results of the units should be disclosed in the proforma accounts of CSD after ensuring that the units follow uniform accounting principles, the CAG has recommended.
This would enable the financial statements of CSD to provide a “true and fair view of the complete operations of the organisation”.
Praising the CSD for its 55 percent increase in gross turnover (Rs. 6,955 crore in 2008-09 from Rs. 4,481 crore in 2003-04), the report says the gross and net profit however had not shown commensurate increase during this period.
“This was mainly due to increase in cost of goods purchased for sale as also increase in quantitative discount given to the units.”
It says that evidence indicated that grants given to various organisations of the armed forces out of CSD profits did not follow the provisions of General Financial Rules (GFR) of the government.
“Grants were given to organisations without even insisting on application for funds. Statement of accounts was never sought before sanctioning the grants. Receipt of utilisation certificates was not watched, as required under GFR. Utilisation certificates were never insisted from major recipients namely the army, navy or air force for the grants provided.”
The proforma accounts prepared by the CSD did not follow the generally accepted regimen of financial reporting, it said.
During the six years from 2002-2003 to 2007-08, Rs. 883.46 crore was transferred in the form of quantitative discount from the Consolidated Fund of India to the URCs.
Evidence also indicated that benefit of quantitative discount (QD) has never been passed to the consumer.
“Such discount could not be viewed as a trade discount as units operated in a captive market with pricing determined in accordance with the existing policies. QD was in fact another way of transferring money from CFI to non-public fund without conforming to the provisions of the GFR,” the report says.
Civilians of unit run canteens of defence forces allege mismanagement
Friday, March 19, 2010 11:22:26 AM by ANI ( 1 comment )
New Delhi, Mar 19 (ANI): Civilians of Unit Run Canteens (URCs) functioning under the three wings of India’s defence forces - Army, Navy and Air Force have sought parity in pay and benefits with their parent organisation, the Canteen Stores Department (CSD).
Under the banner of All India Defence Civilian Canteen Employees Union (AIDCCEU), they staged a protest demonstration to voice their demands here on Thursday.
They said that respective commanders have been exploiting the Unit Run Canteens since these operate as non-public funds, outside the ambit of the Controller of Defence Accounts (CDA) leading to no accountability.
On this count, the CSD as an entity of public funds falls under the purview of CDA.Pointing out this aspect, the agitating staff noted that as for the service conditions and scale of pay unlike their counterparts employed by the CSD, they are deprived of assorted benefits despite the overall turnover being the maximum.
“We give them a profit of 500 crore rupees per annum, but not even a single money is put in for our welfare. 100 percent of money is put in for the welfare of Army, Navy and Air Force, Is it justice? We work as much equal to the Canteen Stores Department, the CSD. The CSD is a wholesale depot from where we take goods and supply to the end customers through our canteens, but the members of CSD are given government salary and we are not. I want to ask the government why such discrimination?” asked Bharat Bhushan, Secretary General, AIDCCEU.
Concurring with these views, A Rajasekharan Nair, President of AIDCCEU mentioned that even after the Defence Ministry had granted the Unit Canteen employees benefits similar to those of CSD, the Chiefs of all the three wings are yet to implement this order.
Canteens are the departmental outlets meant solely for the defence personnel and the items sold here are exempted from different taxes as such what is sold here is cheaper than the open market prices.
There are 35 CSD depots established in all over the country and over 3600 URCs procure and sell different wares from these depots. (ANI)
That was a cut and paste job to highlight what I had been talking all the time that CSD facility is the most abused facility. That govt of India spending crores to run an enterprise called CSD which then supply stores to URCs and act as the converter of public money to private money for gross misuse with no govt control.
I have even post the reply of the Defence Minister on the issue of URCs. Let me try to paste once again :-
GOVERNMENT OF INDIA
MINISTRY OF DEFENCE
LOK SABHA
UNSTARRED QUESTION NO 4212
ANSWERED ON 06.12.2010
UNIT RUN CANTEENS
4212 . Shri KAPIL MUNI KARWARIYA
Will the Minister of DEFENCE be pleased to state:-
(a) whether the Government proposes to hand over all the rights of retail outlets of Canteen Stores Department (CSD) canteens to Unit Run Canteens;
(b) if so, the details thereof; and
(c) if not, the reasons therefor?
ANSWER
MINISTER OF DEFENCE (SHRI A.K. ANTONY)
(a) to (c) : Canteen Stores Department does not have its own retail outlets. It sells stores to Unit Run Canteens, which are established from the non-public fund of the three Services and are under their control.
Pl take close look at the reply of the Defence Minister of this country who in a way is legimising conversion of public profits into private funds and CAG of this country is shying away from his duty to question the very notion of the reply by the country's defence minister.
Now look at the way non-public fund aided URC has become an instrument to enlarge its scope to expand clientle which directly affect the cost of running CSD enterprise funded solely from the consolidated India.
Canteen Stores Department is mandated to provide stores and liquors to troops at a rate cheaper than the prevailing market rates. The troops means armed forces personnel serving or retired. It has no other meanings. Now look at the expanded list of eligibility for personnel who does not even remotely be consdered as TROOPS unless ammended by an act of parliament. Take a look :-
ARMY HQ / QUARTERMASTER GENERAL’S BRANCH
(CANTEEN SERVICES DIRECTORATE)
CSD FACILITY : LIST OF ENTITLED PERSONNEL
1. Reference your OM No. 5(1) / QB-03 dated 08 Feb 2005.
2. As desired, a consolidated list of entitled categories of personnel for canteen facilities is
forwarded herewith.
(RS Khatri)
Lt Col
Jt Dir
Canteen Services
Min of Def / Fin
Copy to :
CSD HO Alongwith a copy of list as above.
Mumbai
Coms Sectt
QMG Br/QI (E)
OGBR For Information Mean
ORNCC
URC Manual – 2008 • 145
AUTHORISATION OF CANTEEN FACILITIES
EXSERVICEMEN / RETIRED PERSONNELS
S. No. Category Authorised when
1. Ex-Servicemen i) Retires at own request (should have minimum 5
year of Services).
ii) Released from service honourably as a result of
reduction in establishment or after completion of
specific period of engagement or on medical
ground attributable to Military service.
2. Ex-GREF Personnel Same condition applicable to on ex-servicemen
3. Ex-DSC Personnel Getting pension from Defence Service Estimate
4. Ex Coast Guard personnel Getting pension from Defence Service Estimate
5. Ex-Personnel of P & T Having minimum 10 years Service in APS or who retired
Deptt Personnel (APS) directly from APS itself without
reverting back to their parent Deptt.
6. Retired CSD employees Getting pension from CSD funds (Excluding liquor)
7. Ex TA Personnel i) Having a minimum of embodied service of 15 years.
ii) Personnel with disability attributable to Military
service.
iii) Gallantry award winners
8. Ex Recruits Who are in receipt of disability pension are entitled to
avail canteen facilities including liquor.
9. Ex-Gentlemen Cadet Who are in receipt of disability pension are entitled to
canteen facilities including liquor at par with retired
officers of three Defence 10. Ex ECO’s/SSRC officer Who are in receipt of retention free from Defence
on the reserve list Service Estimate
11. Reservists During Non Training Period
12. Personnel of Ex-States Who are in receipt of retention fee from Defence
Forces Service Estimates
URC Manual – 2008 • 146
13. Family of Deceased Unmarried personnel who are killed in Military
Service Officer operation/aid to civil
authorities / counter insurgency /
internal security duties or due to accident while on duty
are entitled all canteen facilities including liquor.
14. Widows of Officers Who are in receipt of pension from Defence Services
including Hony Estimates including liquor.
Commissioned
15. Widows of JCO’s/ ORs Who are in receipt of Pension from Defence Service
Estimate are entitled for all facilities excluding liquor.
16. Dependent Parents either canteen Facilities (Excluding liquor)
of Serving / Retired parents
of deceased Unmarried.
Defence Service
17. All Serving personnel All canteen facilities including liquor / AFD items
of the Army, Navy and during service period
Air Force
18. Serving Coast Guard At par with three Defence Services during service
Personnel period
19. All serving GREF All canteen facilities including liquor / AFD item
Personnel
20. Foreign Military Attending Courses of instructions in our training
Personnel Establishment
21. Personnel of Having minimum of embodied service of 5 years
Territorial Army
22. Assam Rifles All canteen facilities including liquor during service
period
23. Police Battalions All Canteen facilities including liquor authorised so
/ BSF / CR PF long as they remain under the operational / administrative
control of the Army
URC Manual – 2008 • 147
24. Canteen Facilities NCC Personnel
a) Whole time NCC All canteen facilities including liquor / AFD
Officers
b) Associated NCC All canteen facilities except liquor / AFD
Officers
c) Under Officers / – do –
Sgt Major
Instructors
employed on part
time or whole
time basis
d) NCC Cadets – do –
during period of
training either in
annual camp or
by attachment to
regular Army Units
e) Ex-Gentlemen
Cadet
25. Serving Defence During Service all facilities less liquor – local taxes
Civilians as applicable will be levied.
26. Serving Civillians – do –
employees of URCs
27. All Ranks / All entitled to purchase AFD items (Refrigerator, TV,
Serving / Retired Music System etc) through CSD
28. All Ranks / Serving All are entitled to purchase two wheelers through CSD
/ Retired
One need to dumb enough not to understand how the ministry of defence headed by the Defence Minister, the top echlon of all three services , the complete controllers of defence accountant staff / est are hand in gloves to abuse the CSD facility converting public money into private fund for gross misuse with our CAG shying away from its duty.
