Govt admits to scam in rice exports

NEW DELHI: The government has admitted that public sector units (PSUs) did not follow a transparent procedure for non-basmati rice exports during the UPA’s first term.

The matter has been referred to the Central Vigilance Commission (CVC) for its advice, commerce and industry minister Anand Sharma said in Lok Sabha on Friday.

This disclosure could lead to more trouble for the government, which is already grappling with a number of scams, including 2G spectrum allocation, Adarsh Housing Society and Commonwealth Games.

“With the exception of Mauritius, the exporting PSUs (public sector enterprises) of the department of commerce did not follow a transparent procedure for selection of domestic associates or determination of the price at which the rice was exported,” Mr Sharma said in a written statement.

All exports had taken place between December 2007 and March 2009 when the commerce ministry was headed by Kamal Nath, who is currently in charge of the road ministry.

Show-cause notices have also been slapped on the officials allegedly responsible for hugely disproportionate profits to private parties and denial of legitimate profits to PSUs, the statement said. The possibility of collusion cannot be ruled out, it added.

The government had banned export of non-basmati rice in 2008 to put a check on rising prices in the domestic market. However, it allowed export of a limited quantity to some least developed nations, including African countries, on diplomatic considerations. But the pre-determined terms of contracts between foreign buyers and domestic suppliers (with small margins for the PSUs) led to “hugely disproportionate profits accruing to private parties, namely the foreign government nominated domestic suppliers in India”, Mr Sharma said. These parties have since been blacklisted.