Millers get paddy worth ~700 cr without giving bank guarantee

Parveen Arora
Tribune News Service
Karnal, October 28

In a major lapse, the Food and Civil Supplies Department has allegedly issued paddy worth around Rs 700 crore to around 70 new and leased rice mills without obtaining bank guarantee or documentation pertaining to mortgage of property equivalent to 5 per cent of cost of allotted paddy for custom milled rice (CMR).

Officials concerned refused to confirm the figures of paddy. Sources in the department said 5,000 metric tonnes (MT) paddy was given to a mill with 2 MT capacity, 6,000 MT to a mill with 3 MT capacity and 7,000 MT to a mill with 4 MT capacity.

Considering an average of around 6,000 MT allotted to each mill, around 4 lakh MT costing around Rs 708 crore at a rate of Rs 1,770 per quintal had been allotted to millers so far without seeking their documents.

On October 18, the Additional Director (Procurement) issued a circular, directing procurement agencies to take 5 per cent bank guarantee with guarantee of two rice mills which had delivered CMR during the last three years.

New rice millers had to mortgage the property equal to 5 per cent of the value of paddy allotted with additional guarantee of two rice mills which had delivered CMR during the last three years. Kushal Boora, DFSC, admitted the issuance of paddy to some millers without taking bank guarantee.

He said they received the order on bank guarantee on October 19 and started the process to collect bank guarantee and documentation of mortgage. “We will complete this process in two or three days,” he said.

Minister Karan Dev Kamboj claimed it to be a lapse. He said an inquiry would be initiated to fix responsibility. If anyone was found guilty, action would be taken against the erring officials, he added.