CSD Canteens : Funds spent on purchase through CSD

Funds spent on purchase through CSD

The below information was given by the Minister of Defence Shri.A.K.Antony as a written reply for the questions raised by the member of Shri.Shrimati Kusum Rai in Rajya Sabha on 12.12.2012.

The questions are...
Whether CSD procurement has been found highly opaque and financial norms have been flouted to provide poor quality of products to armed forces..? and 
Whether almost 300 firms supplying items to CSD do not have market credentials..?

A detailed statement submitted by the Minister in the House as follows...

‘FUNDS SPENT ON PURCHASES THROUGH CSD’

Government does not purchase material for its use from Canteen Store Department (CSD).  However, CSD procures materials for Unit Run Canteens (URCs) of Tri-Services.  The details of funds spent by CSD on purchases of material during 2011-12 and 2012-13 are as mentioned below :-

Financial Year
Net Purchases
(Rs. in Crore)
2011-12
9734.78
2012-13
6027.84
(up to October 2012)

Purchases, as per rules, are to be made by CSD directly from the manufacturers or sole distributors / importers of the products in the country as per approved rates and terms of supply agreed to between the suppliers and the CSD.  All items approved for introduction in CSD and the firms supplying these items are cleared by various Committees such as Preliminary Screening Committee, Price Negotiation Committee etc and finally approved by the Board of Administration (BOA).

All items prior to placement of initial order have to undergo market survey to confirm popularity, after sales service arrangement etc., followed by factory inspection, hygiene inspection.  All edible products are tested by Composite Food Laboratories.

Though firms having market credentials are approved as supplier by BOA, instances have come to the notice of the Ministry regarding financial irregularities in CSD.  Recently two officers of CSD have been arrested by CBI on graft charges.  As reported by CBI, investigation in the matter is going on.

Continuous efforts are being made to bring in more and more transparency in procurement, such as uploading orders details, payment details etc. on CSD website.

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