The Union government has decided to amend the National Dairy Development Board (NDDB) Act to address the acts of errors and omissions and a flagrant violation of the spirit and the letter of the law in the existing Act. The
department of animal husbandry and dairying under the Union ministry of fisheries, animal husbandry and dairying, states the amendment is proposed for better management and monitoring of the functions of NDDB and has invited comments from the public. Over the past few years,
Moneylife has, over a series of articles, brought to light the shenanigans at NDDB.
According to whistle-blowers and insiders, the government’s decision to amend the NDDB Act is undeniably a consequence of the rampant disregard for moral and ethical conduct, ducking probity in public affairs and tucking misdeeds under opaque and confusing reporting, especially by people who headed the board over the past two decades.
“It is a story of an overwhelming desire to run the affairs of NDDB, a national statutory body, as a private fiefdom and evading the compliance of Right to Information (RTI) Act and Central Vigilance Commission (CVC) Acts in its subsidiaries, transferring NDDB’s public funds to its subsidiaries and illegally rendering such funds and its use beyond accountability under the NDDB Act and the RTI and CVC Acts!” they say.
As per the amendment proposed in Section 43 of the NDDB Act, nominee directors on the NDDB would also be
ex-officio directors on the boards of subsidiaries companies (of NDDB). Further, it is barred from setting up any subsidiary company and transferring any part of its share capital to any person without prior approval from the government. (NDDB subsidiaries). (
Read: Exclusive! Mother of Dairy Sham. Where Have NDDB’s 16 Subsidiaries Vanished?)
In Section 43, three new Sections are being inserted to make applicable provisions of the CVC Act and the RTI Act to NDDB and all its subsidiaries.
As reported by Moneylife, Mother Dairy Fruit and Vegetables Ltd (Mother Dairy or MDFVPL) and NDDB Dairy Services (NDS), the two subsidiaries of NDDB, suddenly reported losses through two consecutive financial years.
Especially during FY2018-20, Mother Dairy incurred a loss of Rs261.95 crore, out of which almost Rs190.85 crore are due to provisioning against deposits made in Infrastructure Leasing and Financial Services (IL&FS). On the other hand, NDS, in which NDDB had invested about Rs200 crore, has earned a profit of just Rs72 lakh over the past 10 years, shows a reply given in the Lok Sabha. (
Read: Why NDDB Subsidiaries Mother Dairy and NDDB Dairy Services Incurred Losses in Past 2 Years?)
As Moneylife has pointed out, while an audit of the National Dairy Plan had begun in 2020, NDDB itself and its subsidiaries continued to escape comptroller & auditor general (CAG) scrutiny by using one strategy or the other. In fact, this resistance has been on for well over a decade.
Consequently, NDDB’s subsidiaries also escaped scrutiny despite the many controversies and questions over the use or misuse of funds that have been reported by Moneylife over the past year or more (see list at the bottom of this article).
In December 2021, Parshottam Rupala, minister for fisheries, animal husbandry and dairying, told the Rajya Sabha that “The CAG has undertaken the audit of national dairy plan phase I (NDP I), which was implemented by NDDB through a network of end implementation agencies (EIA). CAG provided a draft para on wasteful expenditure for one of the sub-projects on pilot doorstep artificial insemination (AI) delivery services. Pointwise clarification has been provided to CAG by this department in consultation with NDDB.”
To put things in perspective, the CAG audit was pending for over 10 years, even after the Delhi High Court had issued a clear order a decade ago.
Further, the minister informed the upper house that his ministry had requested the department of economic affairs (DEA) to issue the necessary directions to CAG for getting the accounts of NDDB audited. “The HC of Delhi in its judgment dated 27 January 2010 has accepted the position of the government that the CAG can audit the accounts of NDDB under section 14(2) of the CAG Act. Accordingly, this department has requested CAG for auditing the accounts of NDDB vide letter dated 13 March 2020.”
“What the amendments signify is that the flexibility and freedom that had been provided to NDDB and stated upfront in the preamble to the existing NDDB Act will stand withdrawn, only because a bunch of people with vested interests desecrated and vitiated the NDDB Act over the last two decades!” the whistle-blowers and insiders say, adding, “But will the guilty get punished and held accountable? Even if they are no longer at the helm of affairs? By now, they may have managed to extinguish the trails leading to their illicit and illegal actions as well as their pecuniary and ill-gotten gains.”
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