CLICK THE LINK BELOW—A BLOG OF THE ECONOMIC TIMES(ET) BY ATUL CHATURVEDI
MY COMMENTS
TEJINDER NARANG
Mr Atul Chaturvedi spells out the criticality of creating safe and hygenic silo capacities for storage and distribution of grains for saving them from impending
doom due to "laid back" attitude of the political and bureaucratic establishment. PPP (PUBLIC PRIVATE PARTNERSHIP) profile arrogates the
power of Governmental entity and makes private party as servant or
servile to their will and command. Promises made by the Government way back in
2008 for capacity creation of 2 million tons are suffering from indecisiveness
on tender specifications.
Reason:: Babudom--the bureaucracy in its personification-- is not keen in taking initiative on application of modern
technology, which in short term is deemed expensive, but long term proven to be cheap
and rewarding. The fact is that even the avoidable “destruction” in conventional warehouses can contribute to short
term benefits and savings. But playing safe and avoiding any muck raking by
audit/CAG/Vigilance is preferred than to rationally justify the economic
relevance of silos.
Systemic malaise gas set in that is sapping the decision making at National and State levels. Ministers want secretaries of the concerned departments to recommend proposal for approval; while Secretaries demand that Ministers direct them in writing. When this duo fails to agree--the matter may get referred to Committee of Secretaries(COS) for a view that is put up to EGOM (Empowered Group Of Minsters), then to the PMO-- who may forward it to Cabinet for endorsement. Any observation or comment at any of these levels means de-novo review of the policy paper. Thus a policy initiative becomes a shuttle cock hit from one side to another.
Economic pandits have named this process as “ policy paralysis”. Power of the position means taking responsibility of reforms and actions but here that virtue is conspicously absent. That was not the cas till 1990-2000s.
The right way is known to all. Commercial decisions are best left to the concerned departments than to the Cabinet which has to take view after about 2-3 months of a policy being initiated . The problem is that Government wants to be in business in which it has no business yet avoids all decisions that are essential for the business.
Systemic malaise gas set in that is sapping the decision making at National and State levels. Ministers want secretaries of the concerned departments to recommend proposal for approval; while Secretaries demand that Ministers direct them in writing. When this duo fails to agree--the matter may get referred to Committee of Secretaries(COS) for a view that is put up to EGOM (Empowered Group Of Minsters), then to the PMO-- who may forward it to Cabinet for endorsement. Any observation or comment at any of these levels means de-novo review of the policy paper. Thus a policy initiative becomes a shuttle cock hit from one side to another.
Economic pandits have named this process as “ policy paralysis”. Power of the position means taking responsibility of reforms and actions but here that virtue is conspicously absent. That was not the cas till 1990-2000s.
The right way is known to all. Commercial decisions are best left to the concerned departments than to the Cabinet which has to take view after about 2-3 months of a policy being initiated . The problem is that Government wants to be in business in which it has no business yet avoids all decisions that are essential for the business.
The establishment champions the cause of farmers for higher
yields, productions and above all ensuring massive open ended procurement on
Government account. As of now $20 billion is spent annually without blinking an
eye lid to purchase and hoard 70 million tons of grains by FCI on Government account. But
only 60% is sheltered in “not too good” conditions which are merely horizontal buildings/ storages layered with rows
of Jute or PP bags. Balance 40% is stored on "as is where is basis" on the bare ground as the bed and sky as the
roof. (SEE PICTURE BELOW AS REPRODUCED IN CAG REPORT N0. 7 OF MAY 2013).
About 28 million tons of grains whose economic cost is Rs 25000/mt or total Rs. 70000 crores or $11 billion is lost with no accountability. This is loss per year. These losses are repeated every year. For five years they total 350000 crores or $55 billion—without adding the element of interest.
About 28 million tons of grains whose economic cost is Rs 25000/mt or total Rs. 70000 crores or $11 billion is lost with no accountability. This is loss per year. These losses are repeated every year. For five years they total 350000 crores or $55 billion—without adding the element of interest.
DIFFERENCE OF OPINION
Reports indicate that there is a difference of opinion
between the Food Ministry and Planning commission. The former is keen on silos
with rail connectivity, while the later continues to harp on standalone silos.
The onus of responsibility stands divided or shared. That way none can be
accused of dilatory tactics. Ideally suited would be silos with rail connectivity with top loading bottom discharge wagons. (see the link for this controversy.)
http://www.indianexpress.com/news/grain-silos-project-on-fci-plans-tender-next-month/1066555/
If any State Government. takes the initiative of construction of silos, it has to seek viability gap funding or full or partial funding from the Center. No time limit is fixed for that approval. The project then never sees the light of the day.
http://www.indianexpress.com/news/grain-silos-project-on-fci-plans-tender-next-month/1066555/
If any State Government. takes the initiative of construction of silos, it has to seek viability gap funding or full or partial funding from the Center. No time limit is fixed for that approval. The project then never sees the light of the day.
FINANCIAL OUTLAYS
About 30 million tons of wheat procurement is done in April--May every year. Money spent within two months is Rs 60000 crores or $10 billion. When it comes to spending on infrastructure of silos and rails, the priority is audit and vigilance and without any foreseeable action in last five years.
CACP
says that food
Ministry needs additional financial outlays for silos—but that remians unaccounted
in the budget of Food Security Act. Likewise Atul speaks about tremendous shortage of rail rakes.
At a time when Government is guaranteeing right to food—transportation
bottlenecks can be sighted as another weak link in timely supplies. What is then the commitment to eradicate hunger and poverty?? This potential extra expenditure is also not part of the Food Security Act. why not openly account for that? Reason-- Concealment of the higher fiscal deficit for populist perception prevents reflecting these figures in the National balance sheet. Can this be hidden from the rating agencies?.
Institution of Mechanical Engineers, London (IME) in its report on “Global Food –WASTE NOT IF WANT NOT’-- has commented that India annually wastes 21 million tons of wheat. It is equivalent to annual wheat production of Australia. When grains are wasted, the Nation wastes with open eyes—land, water, power, fertilizer, labour and vital economic resources --that is unpardonable. On the identical issues I wrote in ET 26.8.2010. but after more than three years as Atul’s blog states that nothing has changed on the ground.
About 30 million tons of wheat procurement is done in April--May every year. Money spent within two months is Rs 60000 crores or $10 billion. When it comes to spending on infrastructure of silos and rails, the priority is audit and vigilance and without any foreseeable action in last five years.
Institution of Mechanical Engineers, London (IME) in its report on “Global Food –WASTE NOT IF WANT NOT’-- has commented that India annually wastes 21 million tons of wheat. It is equivalent to annual wheat production of Australia. When grains are wasted, the Nation wastes with open eyes—land, water, power, fertilizer, labour and vital economic resources --that is unpardonable. On the identical issues I wrote in ET 26.8.2010. but after more than three years as Atul’s blog states that nothing has changed on the ground.
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