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Rajputana Rifles canteen tops list of violators says CAG report

Alcohol worth `19 cr in open market smuggled say findings

THE COMPTROLLER and Auditor General ( CAG) of India has exposed a scam in the diversion of concessional quota liquor from Indian Army canteens.

A performance audit report of the army's Canteen Stores Department ( CSD) 2010- 11 carried out by the CAG found that at least three army units overdrew their liquor quota. This overdrawn booze was valued at Rs 8 crore for the army which receives it at a concessional rate, but was priced at Rs 19.45 crore in the open market. The CAG report cites the Military Station Headquarters at Dehu Road, Rajputana Rifles Regimental Centre at Delhi and the Military Station Headquarter, Jabalpur, as the transgressors.

The government does not directly subsidise the army's liquor; instead it does not levy certain taxes such as sales tax and value- added tax on the liquor procured by the military. Thus, overdrawing of liquor by army units leads to a loss to the exchequer.

According to the CAG, the Delhibased Rajputana Rifles Regimental Centre ( RRRC) was the biggest culprit in this regard. The audit, conducted on records over a six- year period between 2003 and 2009, shows that RRRC Canteen overdrew concessional liquor in excess of the authorised quota by over 57,000 cases valued at ` 4.79 crore at discounted prices or about ` 12 crore at market rate.

The government auditors observed: " The CSD and the services should ensure that liquor is demanded by and issued to URCs ( unit- run canteens) strictly as per their authorisation to prevent its leakage into the civil market." The Military Station at Dehu Road, a cantonment town in Pune, drew 26,259 cases over the allotted quantity, worth ` 1.75 crore.

The CAG found that the URCs did not comply with instructions while placing the orders. The CAG concludes, " The quantum of excess issue due to this failure could not be ascertained in the absence of details of closing stocks held by the URCs." This is not the first instance where military units have resorted to overdrawing liquor at concessional rates.

In 2002, then brigadier R. P. Singh of the Maratha Light Infantry leading 35 Infantry brigade was caught diverting discounted army liquor into the open market.

He earned the sobriquet " Booze Brigadier" and was charged in a court martial, before the army terminated his services in 2004. Singh's transgressions happened when he was posted in Delhi with the Maratha Light Infantry. He had set up an organised racket of overdrawing liquor from the CSD and ferrying them in trucks to Delhi- Haryana border and selling them in Haryana.

On August 4 this year, Singh's petition at the Armed Forces Tribunal to withdraw his dismissal was struck down. Earlier, in May, the tribunal had waived his court martial sentence of nine months imprisonment.

This time he did not have his way.

Major general ( retd) R. C Chopra said he is aware of small- scale diversions.

" If this is the scale the CAG has discovered, drastic action needs to be taken," he said.

Army sources said there are strict guidelines and rules that govern the procurement of liquor by the army.

In 1971, the army HQ stipulated that every liquor indent asking for the issuance of liquor from an area depot were to be signed by an officer holding the rank of a lieutenant colonel or above.

There are several other guidelines, army sources said, but they are rarely, if ever, followed.

This is how the procurement works: The army sources its liquor directly from the manufacturers. An order is placed with the makers periodically based on the requirement flows from the URCs. The URCs base their calculations on ' dependency strength' or the number of personnel in a sub- area HQ. This number is sent to the area depots, which in turn pass it on to the CSD. The loop is closed when the manufacturer directly supplies area depots to reduce trans- shipment troubles.

According to some army officers the quota beneficiaries include civilian friends of army officers, audit parties, police personnel, etc.

Brigadier ( retd) Gurmeet Kanwal said that some of the reports of overdrawing of liquor could be exaggerated. " However, when such reports are confirmed, they are investigated and deterrent action is initiated," he said.

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Publication:Mail Today (New Delhi, India)
Date:Aug 14, 2010
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