How NDDB Granted Rs22.28 Crore under NDP to a Non-Operationalised Milk Producer Company During Dilip Rath’s Tenure
After the exit of Dilip Rath, the controversial chairman of the National Dairy Development Board (NDDB), new information available to us that shows how he transferred funds to a non-operationalised milk production company from Bihar under the National Dairy Plan (NDP)-phase-1. According to insiders, this was done in 2017 in violation of the eligibility criteria for grant from NDP phase-1, headed by Mr Rath as mission director.
Bapudham Milk Producer Company was incorporated on 12 April 2017 with a paid-up capital of Rs12,000. This company was inaugurated by Radha Mohan Singh, former minister of agriculture as Motihari was his constituency. On 21 July 2017, it was given a project sanction from NDDB for NDP phase-1 with a total outlay of Rs33.35 crore.
According to insiders, NDDB sanctioned Rs22.28 crore as a grant under NDP phase-1 on 21 July 2017 with only a vague commitment that Rs11.07 crore will be the contribution by the producer company for the project in the future.
Last year in February, while responding to a question in the Rajya Sabha, Dr Sanjeev Kumar Balayan, minister of state for fisheries, animal husbandry and dairying, had said that based on a request from NDDB, the department had authorised the project steering committee (PSC) to relax the eligibility criteria for the Bapudham Milk Producer Company.
"PSC in its meeting held on 21 July 2017, approved Bapudham MPC as an end implementing agency under NDP phase-1 after relaxing the eligibility criteria for milk producer companies. As per the decision of the PSC, funds under NDP phase-1 were released to the Bapudham Milk Producer Co only after it was operationalised," he says.
However, Dr Balayan, the minister, at that time did not reveal the amount provided to the Bapudham Milk Producer Co by NDDB under the NDP phase-1.
Bapudham Milk Producer Co, located at Motihari in the East Champaran district of Bihar, was finally operationalised on 2 October 2017.
Interestingly, there is a note written by SS Kandpal, director in the department of animal husbandry and dairying and fisheries that records the modification in the eligibility criteria for producer companies under NDP phase-1.
The note dated 4 July 2017, states that the National Steering Committee (NSC) had changed the eligibility criteria for producer companies to participate in NDP phase-1 by reducing the number of pourers to 20,000 from 30,000 without changing the original requirement that the annual average milk procurement of any such milk producer company ought to be more than one lakh kg per day.
"Since NSC has already approved further reduction of the criteria in due course, if necessary, NDDB is requested to take up the proposal at the project steering committee (PSC) meeting and inform the department of the decision made accordingly," the note says.
However, it appears that the PSC took a liberal meaning of this note and sanctioned a grant to the Bapudham MPC, overlooking other criteria. The PSC comprising key persons like Mr Rath, mission director and chairman of NDDB, Sangram Chaudhary, executive director (ED) of NDDB and Meenesh C Shah, general manager (GM) and group head of CMC, stated, "...the eligibility of Bapudham Milk Producer Company was assessed based on the eligibility criteria as laid out in the project implementation plan (PIP) volume-I of NDP phase-1. It is recommended that the existing eligibility criteria to be relaxed for Bapudham MPC as a special case, since the company is yet to be operationalised..."
The agenda note for the 24th meeting of PSC further shows "...it is therefore recommended that the proposed sub-project plan for village-based milk procurement system be approved for the period 2017-18 and 2018-19. The total outlay for the period 2017-18 to 2018-19 stands at Rs3,335.88 lakh (Rs33.35 crore) of which Bapudham MPC will avail Rs2,228.34 lakh (Rs22.28 crore) as grant-in-aid and remaining Rs1,107.54 lakh (Rs11.07 crore) will be its contribution.”
The agenda note also mentions creating the necessary infrastructure for procurement in about 150 villages and a plan to create further infrastructure to cover another 100 villages for Mother Dairy Fruit and Vegetables Ltd (Mother Dairy or MDFVPL), a subsidiary of NDDB, before the operationalisation of Bapudham MPC. "The assets created by Mother Dairy will be transferred to Bapudham MPC before the operationalisation of the MPC... Bapudham Milk Producer Company has a membership base of about 1050 members. Once the company is operationalised, which is planned in October, the manpower and the asset created under NGC will be migrated to the MPC," the note says.
A July 2018 report from the Times of India
quotes Mr Rath, the then chairman of NDDB, informing that, under NDP phase-I, NDDB has approved funding of Rs22 crore to the MPC for the implementation of village-based milk procurement systems.
We sent an email to NDDB about this. However, till writing this report, we have not received any reply from them. We will incorporate their reply as and when we receive it.