#India-Maharashtra food scam: Private companies eat up Rs 1,000cr meant for poor


, TNN | Nov 3, 2012, 01.12AM IST

Maharashtra food scam: Private companies eat up Rs 1,000cr meant for poor
In Maharashtra, private firms floated fronts as ‘mahila mandals‘ and now control rations worth Rs 1,000 crore, the report said. It also specified violations in Karnataka, UP and Meghalaya.
NEW DELHI: Private companies have hijacked the government’s flagship scheme to provide food to poor children and their mothers, the Integrated Child Development Scheme (ICDS), with contractors in Maharashtra alone controlling Rs 1,000 crore worth of supplies in contravention of Supreme Court orders, a report of the SC commissioners office has said.The SC orders bar contractors from supplying rations under the scheme. It only permits village communities, self-help groups and mahila mandals to buy grains and prepare food for children.

The commissioners’ report, submitted to the court on Friday, warned that the contractor-corporate lobby had a firm grip over ICDS rations supply business, worth Rs 8,000 crore, in several states. It specifically referred to Karnataka, Uttar Pradesh and Meghalaya, besides Maharashtra.

Detailing Maharashtra’s case, the report said private companies had floated fronts in the names of ‘mahila mandals’ or women’s organizations to corner the lucrative Rs 1,000 crore annual supply of rations.

The ICDS is India’s primary social welfare scheme to tackle malnutrition and health problems in poor children below 6 years of age and their mothers. It is considered the backbone of government’s efforts to improve the dismal family health indices in India – some of the worst even among developing countries.

The commissioners recommended that an independent investigation be conducted under theapex court’s supervision to investigate the possible nexus “between politicians, bureaucrats and private contractors in the provisioning of rations to ICDS, leading to largescale corruption and leakages”.

The report, prepared by the principle advisor to the commissioners, said the Maharashtra chief minister had been made aware of the scam by the commissioners as well as the National Commission for the Protection of Child Rights. They said the fact that the corrupt system continued unchecked showed the “level of influence” the contractors had over the “levers of power in Maharashtra”.

This report lays bare the modus operandi companies used to corner the lucrative contracts in Maharashtra. The state government first changed its rules in 2009 to allow not only community-based organizations but also ‘women’s institutions’ to bid for the supply – a loose enough term to permit any contractor, company or agency with women on board to bid for the contracts.

Only three of these ‘women’s institutions’ got contracts for the entire state’s ration supply which is worth over Rs 1,000 crore annually. None of these three mahila mandals – Venkateshwara Mahila Audhyogic Sahakari Sanstha, Mahalaxmi Mahila Grhaudyog & Balvikas Buddhesiya Audhyogic Sahakari Sanstha and Maharashtra Mahila Sahakari Grahudhyog Sanstha Limited — had any production capacity of their own.

The three mahila mandals each formed sub-committees with select members handling complete control of administration, finances and operations of the organizations. The sub-committees then gained legitimacy by directly contracting with the state government, securing bank guarantees as well as opening separate bank accounts.

The sub-committees went on to contract five companies to supply the rations. But the members on board these sub-committees were all relatives of the owners of the five companies.

In other words, the companies had formed shell agencies to bid for the contracts on the pretext of being community-based women’s organizations.

Venkateshwara formed two sub-committees. One sub-committee farmed out contract to Swapnil Agro Limited owned by Ulhas Pagariya. The sub-committee comprised Pagariya’s wife and two relatives. The second sub-committee gave a contract to Paras Agro Private Limited, with one Satishrao Munde as managing director. Munde’s wife and daughter comprised the sub-committee.

Similarly, Mahalaxmi formed three sub-committees giving out contracts to Indo Allied Protein Foods run by Rajan Shankar Jadhav, Sai Food and Sai Food Products owned by Pradip Auradkar and Sanjay Auradkar and Kota Dal Mill based in Rajasthan.

Maharashtra Mahila Sahkari, which is actually a company and not a society with Rama Agrawal as vice-chairman, gave the contract to Sagar Foods run by her father-in-law Prabhudayala Agarwal.

The principle advisor to the court commissioners, Biraj Patnaik, refused to comment when contacted.

His report said lab reports testing the quality of food grains supplied was also suspect as all three mahila mandals went to the same private lab but government testing found the food lacking. The report said media had earlier highlighted how the ration was of such bad quality that it was at times sold as cattle feed and many times, fungi and termites were found in them. A case on the matter is being heard in the high court as well.

The author added that the report should be seen as a preliminary inquiry and not a comprehensive indictment of the parties. They have asked for court directions for an independent authority carrying out an investigation. The apex court gave the state the opportunity to respond to the report and posted the next hearing for November 23.

 

In Karnataka, only babus and cattle enjoy mid-day meals- children dying…….


Children are dying of malnutrition, but their supposed saviours are minting money from the ICDS scheme, reports Imran Khan in Tehelka

Food for thought 54,260 anganwadis serve mid-day meals in Karnataka

Photos: Sriram Vittalamuthy

A PROBE by the Karnataka Lokayukta into the supply of food to the Integrated Child Development Services has found that Department of Women and Child Development officials in connivance with the contractor, Christy Friedgram Industry, were siphoning off funds meant for the mid-day meal scheme. The revelation has come at a time when the state is witnessing close to two-three deaths every day due to malnutrition.

The mid-day meal scheme, which costs the state government Rs 600 crore per year, was meant to provide basic nutrition for children below the age of six. However, DWCD officials and CFI delivered sub-standard food after skimming off funds.

According to sources in the Lokayukta, DWCD Director Shyamala Iqbal used to receive Rs 20 lakh per month as bribe, while Deputy Director Usha Patwari and Assistant Director Muniraju used to get Rs 15 lakh per month from CFI for their tacit involvement. “All department officials, right from the taluk level, would collect money every month from the CFI office in Malleswaram, Bengaluru,” the sources say.

“During 2010, we received an anonymous letter detailing the racket, which was duly forwarded to the Lokayukta for investigation,” says Nina Nayak, chairperson of the Karnataka State Commission for Protection of Child Rights (KSCPCR). She submitted a report to the government following complaints by gram panchayats about the sub-standard food supplied by CFI. “We received letters from parents who complained of their children falling sick after consuming the food,” she says.

The ICDS is the largest programme for promotion of maternal and child health and nutrition not only in India but the whole world. The scheme was launched in 1975 in pursuance of the National Policy for Children. The beneficiaries are children below six years, pregnant and lactating women and women in the age group of 15-44 years. In Karnataka, there are around 54,260 anganwadis, with 33 lakh children entitled to free mid-day meals.

Earlier, the government-owned Karnataka State Agro Corn Products Ltd (KSACPL), which used to manufacture and supply energy foods to anganwadis since 1973, provided mid-day meals. “The KSACPL started making losses in 2001, after the DWCD handed over 50 percent of the energy food supply contract to CFI,” says H Subbaiah, the last managing director of the company. Due to insurmountable losses, the company was shut down last month.

Concerned over reports of fraud and tardy implementation of the ICDS scheme, the Supreme Court had issued a directive in October 2004 prohibiting the use of contractors in the supply of mid-day meals under the scheme.

“This is when CFI hit upon a novel plan to counter it,” says a middle-level DWCD official, who was shunted out later. “CFI entered into a five-year contract in 2007 with a budget of Rs 600 crore for building the capacities of self-help groups.” The company then set up the Mahila Supplementary Nutrition Production and Training Centres (MSNPTCs) in 139 of the 176 taluks.

An employee working in one of the MSNPTCs later wrote to the KSCPCR explaining the way these centres were being run. A copy of the letter, which is with TEHELKA, throws light on the way the DWCD looked the other way when CFI went about doing its business.

In Raichur district, 2,689 kids died due to acute malnutrition in April-August 2011, says official data

According to the letter, “Many of the training centres were not producing the required quantity of energy food. They were procuring ready-to-eat meals directly from Tamil Nadu and dumping it in the training centres. The food was rejected by the locals and was used as fodder for the cattle. Indents given for fulfilling orders were manipulated and illiterate women were hired for the job (according to the agreement, they had to pay a small part of the profit to these women).”

“CFI had set up a parallel channel of giving bribes,” say sources in the Lokayukta. “Right from the taluk level, child development project officers would receive around 1 percent of the amount cleared.”

This year, on 10 March, Lokayukta officials raided Shyamala Iqbal’s house and found 900 grams of gold, diamonds worth Rs 4 lakh, bank deposits worth Rs 65 lakh and a Toyota Innova. They also found documents showing ownership of a commercial complex at Church Street, Bengaluru, a house in HAL 3rd Stage worth Rs 60 lakh and a site in Arkavathy Layout, also in Bengaluru. Shyamala Iqbal did not respond to queries by TEHELKA.

The whole network was managed by CFI employees Kumaraswamy and SS Mani from the state level. “Earlier, the money was given to the officials wherever they were located. After a dispute, it was centralised at CFI’s Malleswaram office,” says the officer. Interestingly, a faction of the pro-Kannada outfit, Karnataka Rakshana Vedike, was roped in for proper distribution of the bribe money. All the officers would come in the first week of every month to collect their share.

Responding to TEHELKA’s queries, CFI general manager (administration) Shivanandan said, “The matter is sub-judice and an inquiry is going on. It is too premature to comment on anything now.”

According to information obtained under RTI, more than 21 lakh children in the state are mildly malnourished and 12 lakh moderately malnourished. More than 70,000 suffer from severe malnutrition.

Even if one goes by the official data, the rate of deaths is quite alarming: almost two-three deaths per day due to child malnutrition. According to the DWCD, between April and August 2011, 2,689 children have died due to acute malnutrition in Raichur district alone.

Hunger Pangs

Rs 600 cr the annual cost of the mid-day meal scheme

33 lakh children in the state are eligible for mid-day meals

70,000 children suffer from acute malnutrition in the state

2-3 children die of malnutrition every day, on an average

THAT THE state cannot afford to be complacent on the child nutrition front is obvious from Karnataka’s 11th rank in the India State Hunger Index. According to the findings of the third National Family Health Survey (NFHS) in Karnataka, the infant mortality rate is 43 deaths per 1,000 births (before the age of one) and 55 deaths per 1,000 births (under the age of five). The NFHS study also says that infant mortality in rural areas is 28 percent higher than in urban areas. The study also reveals that more than half the women in Karnataka (52 percent) have anaemia, including 63 percent of pregnant women with mild anaemia. The recently released state Economic Survey report of 2012 reveals that poverty in Karnataka continues to be the highest among the southern states.

As the CFI battles to clear its name, the government is unlikely to renew its contract. However, it has inked a deal with mining giant Vedanta to fill in CFI’s shoes. On 10 April, Vendanta entered into an MoU with the government to provide mid-day meals to two lakh kids in four districts. Not only is this Rs 12 crore deal in violation of law (as the SC ruling of 2004 mandates no middlemen), it is being seen as part of Vedanta’s PR exercise in the wake of controversies surrounding its mining operations in Odisha and elsewhere.

R Manohar, head of programmes at South India Cell for Human Rights Education and Monitoring, says he can’t understand why the state is showing urgency in signing the deal, when there is already a PIL in the Karnataka High Court challenging the involvement of middlemen. “We have seen how CFI functioned. We don’t want another private company playing with the children’s lives,” he says.

Imran Khan is a Senior Correspondent with Tehelka.
imran@tehelka.com

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