FOOD AND CIVIL SUPPLIES DEPARTMENT, U.P.

REPLIES ON THE QUERIES RAISED DURING THE MEETING DATED 23/05/2012 REGARDING FINALISATION OF INCIDENTALS FOR KMS YEAR 2002-03

With reference to the meeting regarding finalization of our incidentals, we are submitting the details sought by you. Kindly appreciate the fact the matter is quite old and our submissions have been made on the basis of information and records available with the department. Further, kindly also consider that the claims have been made on the basis of prevailing conditions and practices at that time. In few cases, there are some changes and modifications, viz. milling capacity ,hence the concerned costs cannot be compared with the current conditions. A) Acquistion Cost 1. Driage: Stock flow statement for paddy for the KMS Year 2002-03 is being furnished as per ANNEXURE-1. 2.Custody and Maintenance: These costs relate to holding of Paddy during concerned period as it had to be retained at the temporary shed/procurement centers . Procurement centers were established close to the farmers range so as to facilitate maximum procurement and fulfill the targets of GOI in this regard. Due to shortage in milling capacity the storage had to be carried out at these temporary centers for long period months. Stock flow statement for paddy is being furnished as per ANNEXURE-1. It is clear from statement that average holding period during the said year was about 1.37 months which should be considered while finalizing the claims. Further, various costs had been incurred at the center for upkeep of paddy stock which are exclusive of mandi labour charges and fees. As the whole paddy procurement is spread over six months ,due to few rice mills and their shortage in the milling capacity, the paddy had to be retained for the said period. Hence custody and maintenance charges may be sanctioned for the said period.

3. Interest charges: The particulars regarding interest component involved on capital blocked during the procurement of paddy. Further is being submitted that the computation of interest be revised on the basis of holding period of paddy in terms of the Stock flow statement furnished as per ANNEXURE-1. 4. Transportation charges: The details of transportation along with the copies of the slab wise rates per Km for transportation have already been with our replies on the comments. Due to the shortage of milling capacity the distances covered were long, hence average distances were high. It is also confirmed that transportation charges were allowed only after deduction of 8 Kms distance. A regions wise statement for average distances covered during the said period for acquisition of CMR has been enclosed as per ANNEXURE-2 on the basis of available records for the concerned year with the department. The above may be considered for sanctioning our claim. 5.Gunny Cost: As already submitted, it is hereby reiterated that the gunnies were reused on specific orders from the State Government in this regard. However during the concerned year, no order for reused of old gunnies were available on record. Moreover, with as the further indents were placed for gunnies by the department, new gunnies were used.

DISTRIBUTION COST 7.Handling and Transportation: These expenses relate to transportation incurred on handling on distribution operations by the department. This relates to expenditure incurred from base godown upto block godowns for further PDS distribution to FPS (Fair price shops). It is significant to mention that the handling and transportation expenses incurred while shifting PDS stocks to FPS have not been taken in the above mentioned expenses which are inclusive of expenses only upto block godown.Copies of slab wise rates and other details have already been submitted along with our earlier replies . 8.Storage: The storage period has been substantially reduced , however, a stock flow statement of offtake during the KMS year 2002-03 is being furnished as per ANNEXURE-3.It is amply from ANNEXURE-3 that the average holding period

of CMR is about 9.49 months and for levy it is about 6.9 months. In your comments, the period has been substantially reduced as opening stocks were not considered and the whole stocks were considered as distributed during the concerned KMS year. The above period may be revised and our claim be considered in the light of the above. In the distribution cost the holding period has been substantially reduced. Whereas, the stocks have been retained at the distribution godown for a substantial period. The holding costs had been borne by the State Government, hence it should be reimbursed by GOI. 9.Interest Charges :From the stock flow statement, it is amply clear that the capital of the department remained blocked for a longer period. It has been substantially reduced to. The details of interest have already been submitted. However, the period of interest incurred on distribution process may be revised in the light of submissions of holding period as per ANNEXURE-3. Kindly consider the above while finalizing the incidentals. As the matter is quite old, the best available information in the records is being submitted, hence due consideration for the same may be given. Further we shall be obliged to submit any other clarification, information in support of our claims.

(N.N.Yadav) Finance Controller Food and Civil Supplies, U.P.