The National Dairy Development Board (NDDB), founded by Dr Verghese Kurien in 1965, is credited with pioneering the farmer cooperatives movement in the country. Over time, NDDB has grown so big that the Union government seems to have lost sight or maybe control of the Board. Currently, there is no full-time chairman; the managing director's (MD's) post was not filled for many years; and the Board has nearly 50% vacancies. Add to that, superfast promotion has been given to an individual who crossed about four to five grades in five years to become chief of NDDB. This case only highlights the failure of corporate governance at NDDB, the once-upon-a-time most reputed cooperative institution in the country.
According to an office circular issued on 16 November 2022 by the human resources department (HRD) at NDDB and seen by Moneylife, Meenesh C Shah, executive director (ED) of NDDB, “has been appointed to the next higher grade on promotion as MD with effect from 15 November 2022.”
Replying to a question in the Rajya Sabha, Parshottam Rupala, minister of fisheries, animal husbandry and dairying, says, "Meenesh C Shah has been functioning as MD of NDDB with effect from 15 November 2022 and was holding the additional charge of chairman of NDDB till 30 November 2022. A proposal for further extension of the additional charge of chairman of NDDB to Meenesh C Shah, for a period of six months w.e.f. 1 December 2022 or till the regular chairman takes charge, has been sent to the nodal department for their approval."
As things stand, Mr Shah was ED and in-charge chairman of NDDB since June 2021
. After the tenure of Varsha Joshi ended on 31 May 2021, Mr Shah was made in-charge chairman and has received two extensions to date. As per the latest extension, Mr Shah's tenure as in-charge chairman ended on 30 November 2022. And before the term ends, he was 'promoted' to the post of MD of NDDB.
It is also essential to know that NDDB has its own statute, and the giant organisation has often argued that the Companies Act does not apply to it. At the same time, as per NDDB Act, its board needs to have eight members, including a chairman, one director from the Union government, two directors who are chairmen of a state cooperative dairy federation, not more than three whole-time directors from amongst the top executives of NDDB and one expert director from outside the NDDB.
At present, NDDB has just four directors, including Mr Shah
. Interestingly, Ms Joshi, an additional secretary in the department of dairy development and whose tenure as chairman ended on 31 May 2021, remains as a director of NDDB. The other two directors are Nihal Chand Sharma, chairman of Himachal Pradesh Cooperative Milk Producers Federation Ltd, and Dr NH Kelawana, vice-chancellor of Gujarat-based Kamdhenu University.
Under Section 8(3) of the NDDB Act, the chairman is nominated by the Union government. However, the government has no role while appointing an MD. It is a decision of the NDDB chairman, who may, if required, also take a pocket-veto of the board to appoint an MD.
In March 2020, replying to a question in the Rajya Sabha, Dr Sanjeev Kumar Balyan, the minister of state for fisheries, animal husbandry and dairying, stated that the All India Services (Death-Cum-Retirement Benefit) Rules 1958 do not apply to NDDB. He also conveyed that the involvement of the Union government or any of its departments or agencies in the recruitment of MD of NDDB does not arise since the service conditions, pay and appointment of NDDB employees are governed by the respective regulations made under the NDDB Act. (Read: Dilip Rath Is Out of NDDB, Varsha Joshi Appointed Interim Chairperson
We sent an email to Mr Shah and Ms Joshi seeking to know the procedure followed for the appointment or promotion of Mr Shah as MD of NDDB. We also asked about the status of the appointment of a full-time chairman for NDDB. Till writing this story, we have not received any reply from NDDB. We will update this article as and when we receive any response from them.
As Moneylife has been writing, the governance standard in NDDB, set up by Dr Verghese, has been going downhill for the past few years.
According to information available in the public domain and from the right to information (RTI) replies, Dilip Rath, a 1979 batch Indian Administrative Service (IAS), was serving as additional chief secretary in the government of West Bengal. He also served as joint secretary in the department of animal husbandry, dairying and fisheries in the government of India between 2008 to 2010. On 5 October 2011, he appeared for an interview for the post of MD at NDDB. On 11th November, he took voluntary retirement and on 1 December 2011, he was appointed MD of NDDB.
Earlier, when Dr Amrita Patel retired in 2014, T Nanda Kumar was appointed as chairman of NDDB. However, he resigned within two years. The department of personnel and training (DoPT) gave additional charge as chairman to Mr Rath until the appointment of a regular incumbent.
However, as mentioned earlier, on 16 November 2022, Mr Shah was promoted as MD of NDDB.
The previous job advertisement for the post of MD at NDDB never fructified into the appointment of anyone. In fact, according to information available from sources, efforts by Mr Rath to try and get an IAS officer on deputation from Union government as MD of NDDB too failed as reportedly no IAS officer found the job worth their while!
According to insiders and whistle-blowers, "There is no advertisement this time for the job of NDDB since Mr Shah couched his appointment as an appointment by promotion (i.e. an internal function) and not an appointment of a candidate from external sources! However, this action patently vitiated the NDDB regulations in the matter."
"10. Appointment by promotion.
10(2) An officer to be eligible for promotion to a post shall be within the age limit and possess the qualifications specified for the post and shall have to put in at least five years of service in the lower post and this limit may be relaxed by the chairman, in exceptional cases, and on the recommendation of a MD.
(3) The educational qualifications, experience, age, etc. specified for any post may be relaxed, in the case of an officer for the purpose of his promotion, by the chairman on the recommendation of a MD.
The last advertisement stated the age limit as 55 years for the post of MD at NDDB. According to sources within NDDB, Mr Shah not just surpasses the age limit of 55 years by more than three years, but his basic qualification is in dairy technology which was never specified in the approved job detail. Mr Shah, who completed his BSc in dairy technology in 1985, has been in the service of NDDB since then. That is about 37 years, and his age would be over 58.
According to insiders and the annual reports of NDDB, as of 31 March 2017, Mr Shah was a deputy general manager (DGM) in the coordination and monitoring cell. Next year, he became general manager (GM) in the same department. However, the annual report from FY2019-20 shows Mr Shah as ED.
"Within a short span of three years, Mr Shah was promoted to GM and ED from his post of DGM. Now, he jumped up once again to the post of MD. How can Mr Shah jump four to five grades from DGM to MD within five years when, in the best case, it would have ordinarily taken him at least 20 years? An astonishing and meteoric rise in a public body!" insiders allege.
Earlier in January this year, the Union government invited comments from the public for amending the NDDB Act for better management and monitoring of the functions of the dairy board.
Apparently, the government's decision to amend the NDDB Act may be a consequence of the rampant disregard for moral and ethical conduct, ducking probity in public affairs and tucking misdeeds under opaque and confusing reporting. But nothing happened after that.
"If the allegations against Mr Shah are true, then it appears entrenched and vested interests not only hold sway in NDDB but seem to have also blocked amendments to the NDDB Act that call for complete transparency, probity and accountability," insiders say.
Meanwhile, according to Mr Rupala, the Union minister, the department of animal husbandry & dairying, with the approval of the department of personnel and training (DoPT), has constituted a search-cum-selection committee (SCSC) to recommend a regular incumbent as chairman of NDDB.
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