The Full Ponty- ICDS and Corruption in India

The full Ponty

Samar Halarnkar, Hindustan Times
November 07, 2012

High-school dropout Gurdeep Singh Chadha, or “Ponty” as his friends call him, has achieved the Indian dream. A portly, religious Punjabi with a salt-and-pepper beard, Chadha (52) has a farmhouse in Delhi’s power belt, Chattarpur; a mansion in Dubai; and sundry other homes and cars. Chadha’s  business empire, the Wave Group, is conservatively valued at Rs. 6,000 crore. It encompasses distilleries, multiplexes (Wave cinemas), sugar and paper mills, real estate, poultry and films (he produced the 2005 Sunny Deol starrer Jo Bole So Nihaal). Chadha’s brothers, sons and a grandson run parts of the empire, but it is Ponty’s networking skills and acumen that keeps them ahead.In 2005, during the reign of chief minister Mulayam Singh in Uttar Pradesh (UP), Chadha won statewide contracts to supply ready to eat food for poor, underweight or otherwise malnourished children under the world’s largest child-health programmes, the Integrated Child Development Scheme (ICDS). Many thought – wrongly – that Chadha’s interests would suffer when Singh’s rival, Mayawati, later won the state. Chadha’s company, Great Value Foods, retained the nutrition contracts, and in 2009, he gained an unprecedented monopoly over the state’s wholesale liquor trade.

Nothing has come of recent moves against Chadha, such as the income-tax department raids in February this year on 25 of his properties in Delhi and UP. Two days ago, the UP Lokayukta was asked to investigate his 2010 and 2011 acquisition of four State-owned sugar mills for roughly – according to the government auditor’s report – a tenth of their value. I had no luck reaching Chadha for comment.

Chadha’s story is unexceptional in a country known for crony capitalism, except that his dominion over the child-nutrition programme does not help a state that is home to every sixth malnourished child in India. Eight million women and 30 million children in UP depend on the ICDS for basic nutrition.

“The (food) is produced in poor hygienic conditions…does not seem to contain the ingredients claimed and the weaning food may not be suitable for babies,” says a report of the National Human Rights Commission, after investigating one of Chadha’s factories and the government crèches in Gorakhpur district during March and April, 2011. Referring to a centralised, poorly supervised nutrition programme, the report says, “63% of the food and funds is misappropriated.”

The contracts awarded to Chadha’s Great Value Foods are also symptomatic of a larger, rarely discussed issue: how politicians, officials and private companies often conspire to fix ICDS contracts, which, according to a 2004 Supreme Court judgement, should be handed only to local self-help groups, women’s groups, or mahila mandals, and village communities. Chadha’s contracts are “a complete violation of the Supreme Court orders“, says a letter sent last month to the Supreme Court Commissioners – who have monitored litigation related to food for India’s poor since 2003 – by their principal adviser Biraj Patnaik.

ICDS contracts are worth more than R8,000 crore, the financing split between central and state governments. In some states, local cooking and supply has had significant impact; in others it has become the subject of scams.

“Despite seven years having past since the Hon’ble Supreme Court banning contractors from the ICDS…the politician-bureaucrat-contractor nexus has managed to violate the orders of this court with impunity,” says Patnaik’s report, which reveals how ingeniously the Congress-controlled Maharashtra government and contractors undermine laws. Similar fiddles were previously revealed in BJP-ruled Karnataka.

After the 2004 judgement, Maharashtra, like many states, continued giving nutrition contracts to the old contractors, arguing it needed time to make the changeover. Five years later, when the state supposedly switched to local groups, Patnaik’s investigations revealed that three mahila mandals had been awarded contracts for the state. The private companies leased by the mandals to produce take-home rations, he discovered, were owned by wives, daughters and sisters of the same mandals.

To be sure, over the last six years, Maharashtra has almost halved the incidence of malnutrition in children, reveals a provisional report released by the International Institute of Population Sciences. But that is largely because a host of government departments acted in concert against the diverse components of malnutrition, including promotion of breastfeeding, the use of toilets and improving healthcare. In vast swathes of the state, things are as bad as ever. Causality is hard to establish, but in Nashik, where 32% of children are stunted, or below normal height, the ration programme is being run by one of the mahila mandals investigated by Patnaik.

India’s progress against malnutrition is out of sync with its economic progress. More than half of children under three were undernourished in 2006, when the last such survey was conducted. That’s only a 6% fall since 1999.

Things can change only if the rot that Patnaik’s report hints at is eliminated. He recommends a special investigation team. Indeed, there is much that requires investigation, locally and nationally. For instance, Patnaik found one of the Maharashtra mandals had subcontracted take-home ration production to a Tamil Nadu company called Christy Fried Gram Industry, which after two years of pressure from the SC Commissioners was blacklisted this year by the Karnataka government for supplying substandard and possibly toxic food to crèches statewide.

Back in UP, two government tenders (issued in September 2012 and due to be opened this month) for micronutrient-rich powders meant for infants being weaned, or moving from breast milk to semi-solid foods, invite applications – for the first time – from mahila mandals, self-help groups and village communities. Prospective suppliers must deposit R45 crore as earnest money and should have manufactured and supplied, to any state, at least R25 crore worth of powdered weaning food over the last two financial years.

As I read the tender conditions, it’s obvious no grassroots group can fulfill such conditions. However, one company can: Chadha’s Great Value Foods.

Samar Halarnkar is a Bangalore-based journalist

The views expressed by the author are personal