Down to Earth
Author(s): Richard Mahapatra
Date: Dec 4, 2012

Supreme Court commissioners report multi-crore scam involving private contractors and bureaucrats in food distribution under Integrated Child Development Scheme

imageRichard Mahapatra

Two commissioners of the Supreme Court in the right to food case have recommended setting up an independent Special Investigation Team, similar to the one for the 2G spectrum scam, to investigate corruption and quality in food procurement for the Integrated Child Development Scheme (ICDS). Following a comprehensive investigation of the scheme in four states, the commissioners have reported a deep-rooted nexus among bureaucrats, politicians and private food contractors to siphon off funds meant for poor children and women.

In October 2004, the apex court prohibited involvement of private contractors in procurement of food for children and women under ICDS. It ordered that ICDS funds be spent on village communities and self-help groups (SHGs) for buying grains and preparing meals. On an average, this would have pumped in around Rs. 6,000 crore to local communities.

But states have been violating this order blatantly or have tweaked the tender systems for the past eight years to favour private contractors. What’s more, food supplied by contractors was found to be much below the prescribed nutrition level.

Under ICDS, anganwadis (centres for providing healthcare and nutrition to small children and mothers in rural areas) provide morning snacks and hot lunch to children between three and six years. Besides, nutrition mix is given to children between six months and three years, and to pregnant and lactating women. It covers 80 million children in the country under the age of six, and 18 million pregnant and breastfeeding mothers through 1.7 million anganwadis.

The commissioners have submitted a 100-odd pages report to the apex court on November 29 2012. This comes after thorough investigation by the commissioners in four states: Maharashtra, Uttar Pradesh, Karnataka and Gujarat.

“It is now (time) for an independent Special Investigation Team to thoroughly probe this nexus and bring to book those who are responsible for stealing food for children of the poorest and most marginalised communities in the country,” recommends the report to the apex court. The report has mentioned how government officials and private contractors have entered into nexus to continue with the old system. The apex court is expected to give its verdict on the recommendations in the near future.

In the past eight years, the apex court gave at least 12 directions to states on violation of its 2004 order. In many cases the court has specifically ordered states like Gujarat to hand over the food contracts to local communities and SHGs.

But as the report finds, states have either outrightly defied this order to tweak the system in such a way that private contractors get to do the same in the guise of SHGs or local community groups. The Central government spends close to Rs 10,000 crore every year on food supply under ICDS.

Ponty finger in this pie

In UP, the state government continues to outsource food supply to private companies, including the one headed by the Gurdeep Singh (Ponty) Chadha, who was killed recently in his Delhi farmhouse along with his brother in a suspected incident of fratricide. His company was severely indicted by the National Human Rights Commission last year for serious malpractices in food supply (Read the report here). On September 24, the government floated a new tender for supply of food under the ICDS. The tender notice does mention SHGs as the preferred agency but has put the condition of Rs 25 crore/year turnover. No local community group can meet this condition, thus making way for entry of private companies. “There has been dissatisfaction about this eligibility criterion for prospective bidders, alleging exclusion of mahila mandals (women cooperatives), SHGs and village committees by setting the financial requirements too high,” says the report.

In Maharashtra, too, the commissioners found that the government obeyed the court order on decentralising the procurement. But it put tough conditions and terms that only private companies could meet. In Gujarat, the state government never took any initiative to implement the court order.

In another interesting finding, the commissioners have found private contractors coming together to monopolise contracts under ICDS, at least in the four states they studied. “Some private contractors have been successful in establishing a monopoly through several states for supply of take home rations for supplementary nutrition provision under the ICDS either through direct contract with the state government or under another cloak,” finds the report.

A massive expenditure of Rs 1,83,778 crore in the 12th Plan to effectively implement ICDS in “Mission Mode”. Would it end as another opportunity for private contractors to amass a fortune at the cost of poor children and mothers needing nutritional care?