FCI incurs Rs484 crore loss due to storage and transit problems

FCI lost about Rs482 crore from storage and transit loss alone this year, while damage to foodgrains was only Rs2.92 crore, food and public distribution minister KV Thomas stated

New Delhi: Food Corporation of India (FCI) is estimated to have incurred a financial loss of Rs484.76 crore in 2010-11 due to damage to foodgrains and storage and transit loss, food and public distribution minister KV Thomas said today, reports PTI.

FCI, a nodal agency for procurement and distribution of foodgrains, is estimated to have lost Rs484.76 crore in 2010-11, as against Rs437.87 crore in the previous year, the minister said in a written reply to the Lok Sabha today.

FCI lost about Rs482 crore from storage and transit loss alone this year, while damage to foodgrains was only Rs2.92 crore, figures revealed.

Up to January 2011, the quantum of foodgrains damaged in FCI godowns was 6,348 tonnes, it said.

The minister said that FCI has initiated 116 cases against irregularities and corruption so far this year.

In a separate reply, Mr Thomas said the Delhi government in December 2010 had seized 1,238 bags of wheat and 461 bags of rice (50 kg each) meant for the Public Distribution System (PDS) that were being diverted.

The state government has take action by cancelling the authorisation of the said ration shop and terminated the transporting agency.

The minister also said the government has received three complaints-two in 2007-08 and one in 2010-11-about supply of poor quality of foodgrains through PDS.

In reply to an another question whether storage of foodgrains in villages by farmers has led to losses due to pests and weather conditions, Mr Thomas said no specific study has been made on this so far.

However, as per the report of Indian Council of Agricultural Research (ICAR) conducted during 2005-07, estimated losses at farm level storage for selected cereal varied from 1.4%-1.9% and that for selected pulses from 1.3%-2.3%, the minister said.

Mr Thomas said financial assistance is being provided under the capital investment credit-linked back-ended subsidy scheme of construction/renovation of rural godowns with an objective of providing scientific storage facilities for agricultural produce, processed farm produce and for prevention of distress sale.

He said recently the government had issued instructions to state governments/UTs and FCI to initiate steps for proper preservation and safe storage of central pool stocks of foodgrains.

They were told to carry out inspection of stocks of foodgrains by senior officers, take strict action against delinquents, construct godowns as per specifications and adopt proper scientific code of storage practises among others, he added.


Auto makers drive better-than-expected sales again in Feb; auto stocks big gainers

Maruti Suzuki, Tata Motors and Mahindra & Mahindra record between 12% and 20% growth, two-wheeler makers Hero Honda, TVS Motor, Suzuki Motorcycle do even better, in a repeat of the January performance

Indian auto makers are celebrating another month of better-than-expected sales, with major manufacturers Maruti Suzuki, Tata Motors, Mahindra & Mahindra and two-wheeler makers Hero Honda, TVS Motor and Suzuki Motorcycle all announcing healthy double-digit figures for February today.

Sales at the country's largest passenger car maker, Maruti Suzuki, rose 15.5% from a year earlier, Tata Motors grew nearly 12% and sales at M&M rose 20%. The two-wheeler makers did even better with Hero Honda reporting a growth of 23.5% for its best sales for February, TVS Motor recording a 24% growth and Suzuki Motorcycle nearly 25%, the companies said.

Vehicle sales in India, one of the fastest growing auto markets in the world, grew by about 30% in 2010, spurred by demand from a growing middle class. But this is expected to slow down this year due to rising interest rates, fuel prices and vehicle costs.

The good sales figures combined with gains from the Union Budget proposals announced yesterday, resulted in auto stocks making the maximum gains of between 5% and 11% on the Bombay Stock Exchange today. The M&M share jumped 8.36% (Rs51) to Rs665.45, Maruti Suzuki gained 7.14% (Rs86) to Rs1,292.90 and Tata Motors was up 5.42% (Rs58) to Rs1,140.40.

TVS Motor share also jumped 11.43% (Rs5.60) to Rs56.35. The Hero Honda stock gained 1.89% (Rs27) to Rs1,492.60, the smallest gainer among auto stocks today, perhaps a reflection more of the difficulties the company is having to cope with after its decision to split from Honda. The Auto index gained the maximum among sectoral indices at 5.64% on the day, compared with the benchmark Sensex which climbed 623 points or 3.5%, to 18,446.

Among the major manufacturers whose performance numbers were awaited are two-wheeler maker Bajaj Auto and heavy vehicle manufacturer Ashok Leyland. The Bajaj Auto stock price was up 5.25% to Rs1,334.85 and Ashok Leyland share gained 11.46% to Rs52.05 on the BSE.

Maruti Suzuki India said it sold a total 1,11,645 units in February 2011 compared with 96,650 units in the corresponding month last year. While domestic sales grew faster at nearly 20%, exports were 15% lower at 10,102 units from 11,885 units in the year-ago period.

Sales of its once-most-popular M800 model also declined by about 14% to 2,712 units compared to 3,178 units in the month last year. The A2 segment recorded 19% growth with such models as Alto, WagonR, Estilo, Swift, A-Star and Ritz. The A3 segment, which has the SX4 and DZiRE models, increased by 27%.

Tata Motors said sales grew 11.69% in February 2011 to 77,543 units from 69,427 units in the month a year ago. Its total passenger vehicle sales in the domestic market stood at 31,909 units, an 18.25% increase from 26,985 units in the month last year.

Sales of the Nano, the company's compact small car which has taken some time to get running, was at 8,262 units. The Indica range sold 10,044 units, slightly down from last year, whereas the Indigo family sold 22% more at 8,966 units. Utility vehicles also grew by 16% to 4,637 units.

In the commercial vehicles segment, Tata Motors said it sold 41,130 units in the domestic market in February 2011, compared to 39,205 units in the corresponding month last year, a very slow 5% increase. Light commercial vehicles constituted more than half the sales at 23,498 units, a growth of 8% over last year. Exports grew by 39% to 4,504 units from 3,237 units in the month last year.

Mahindra & Mahindra said it sold 33,378 units, a jump of 19.66% over the 27,894 units sold in the corresponding period a year ago. Total sales of utility vehicles, including Scorpio, Xylo, Bolero and Pick-Ups, stood at 14,288 units, up 11.5%. Sales of Logan doubled to 1,151 units.

The company said sales of three-wheelers and Gio and Maxximo mini-trucks jumped by 57% to 5,725 units from 3,641 units last year. Light commercial vehicle sales from Mahindra Navistar Automotives were at 900 units, as against 856 units in February last year. Exports jumped 7.38% to 1,411 units from 1,314 units.

The country’s largest two-wheeler manufacturer Hero Honda reported its best sales for February at 4,72,055 units, registering a jump of 23.54% over that in the corresponding month last year. The company sold 3,82,096 units in February last year. This is also the 10th consecutive month of four-lakh plus sales for the company.

“Our performance throughout this fiscal has been very consistent and the strong February numbers are a positive indication for growth to continue,” said Anil Dua, senior vice-president (marketing and sales), Hero Honda Motors. The company’s scooter ‘Pleasure’ continues to do exceedingly well, clocking an average 30,000 units a month.

In Chennai, TVS Motor Company announced a 24% growth in sales to 1,77,412 units, most of it for its scooters, from 1,42,676 units in the month last year. Cumulative sales in April 2010-February 2011 stand at 18,55,460 units, the company said.

Scooter sales grew by 49% to 40,335 units in February this year, from 27,017 units in February last year. Motorcycle sales grew slower by 13% to 71,462 units from 63,394 units. Sales of three-wheelers almost doubled to 4,212 units from 2,132 units.

During April 2010-February 2011, three-wheeler sales grew by a whopping 180% to 35,433 units from 12,549 units in the corresponding period of the previous fiscal. The company exported 24,036 units in February 2011, translating into a 13% increase from February last year. 

Suzuki Motorcycle India attributed the good growth it saw in February to the particularly good response for the GS150R motorcycle, Access125 scooter and the recently launched SlingShot bike. Sales for the month grew 24.86% to 28,738 units compared to 23,016 units in the month last year.

Ford India reported a nearly three-fold jump in February sales at 9,293 units on the back of good response for its small car Figo. The company had sold 3,223 units in January. "The phenomenal Figo has taken Ford to a new level in India," Ford India president and managing director Michael Boneham said. The company has sold over 76,000 units of the small car since its launch last year.

Besides Figo, Ford also sells the Ikon, Fiesta and Endeavour in India. The company plans to launch an all-new Global Fiesta, a premium sedan, in the country soon, the first of at least eight new products it intends to sell in India in the next few years.

Global automakers are increasingly depending on growth in emerging markets such as India and China as they face smaller growth in their home countries.


India’s subsidy bill up by over 100% in four years

As per the Budget presented by finance minister Pranab Mukherjee yesterday, the non-plan expenditure on subsidies for the next fiscal is projected at Rs1,43,570 crore, which is over 102% more than the actual expenditure of Rs70,926 crore during 2007-08

New Delhi: India's subsidy bill is expected to jump by more than 100% during the four-year period ending 2011-12 to Rs1.43 lakh crore mainly on account of rising outgo towards petroleum and food items, reports PTI.

As per the Budget presented by finance minister Pranab Mukherjee yesterday, the non-plan expenditure on subsidies for the next fiscal is projected at Rs1,43,570 crore, which is over 102% more than the actual expenditure of Rs70,926 crore during 2007-08.

The non-plan expenditure on subsidy has been constantly showing an upward trend. It was Rs1,29,708 crore in 2008-09 and Rs1,41,351 crore in 2009-10. However, next year's projection is lower than the Rs1,64,153 crore revised estimate for the current fiscal.

The government had recently set up a task-force headed by Nandan Nilekani to work out the modalities for the proposed system of direct transfer of subsidy for kerosene, LPG and fertilisers. The interim report of the task force is expected by June 2011 and the system is expected to be in place by March 2012.

"To ensure greater efficiency, cost effectiveness and better delivery for both kerosene and fertilisers, the government will move towards direct transfer of cash subsidy to people living below poverty line in a phased manner," Mr Mukherjee had said in his Budget speech.

The greatest share of subsidy allocation is for the three segments-food, fertiliser and petroleum.

While the projected subsidy for food in 2011-12 is Rs60,573 crore, for fertiliser and petroleum it is Rs49,998 crore and Rs23,640 crore, respectively.

"During 2010-11, the nutrient-based subsidy (NBS) policy was successfully implemented for all fertilisers except urea. The policy has been well received by all stakeholders, and the availability of fertilisers has improved," Mr Mukherjee had said, adding that the extension of the NBS regime to cover urea is under consideration.

In 2007-08, the actual subsidy on food was Rs31,328 crore, for fertiliser it was Rs32,490 crore and for petroleum only Rs2,820 crore.

Thus petroleum products saw the biggest jump in subsidies during the four-year period, while food subsidy bill has almost doubled.

This reflects the growing demand for energy as well as rising crude oil prices, even as the government is doing its best to reduce expenditure on fertilisers.

However, the projections for 2011-12 are less than the revised estimates for the current fiscal.

According to the revised estimates for 2010-11, the subsidy on food stands at Rs60,600 crore. At the same time for fertiliser and petroleum, it is as high as Rs54,976 crore and Rs38,386 crore, respectively.

"In my last budget, I had stated that the government would avoid issuing bonds in lieu of subsidies to oil and fertiliser companies. I have adhered to this decision, thereby bringing all subsidy related liabilities into our fiscal accounting," Mr Mukherjee had said.


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