New Delhi, December 28
The Canteen Stores Department (CSD) of the Indian Armed Forces is one such organisation of the Services, which owes over Rs 295 crore to its suppliers and is seeking more budgetary allocation to clear the backlog.
According to available data the aggregate overdue payment of the CSD, as on October 1, 2004, was Rs 298.81 crore. Although the Ministry of Defence (MoD) claims that the payment for the goods supplied by the vendors is made after 30 days from the date of delivery, but there is apparently no outer limit for making these payments. As a result a number of companies, which include some of the multi national and of course the Indian private sector companies have a large amount of dues pending towards the CSD.
Interestingly, the rules laid down for the supply of goods to the CSD have no provision for the payment of interest on the amount due towards the organisation. Although some companies have sought interest on the payment due towards the CSD but the government in a recent answer in Parliament said no incident of suppliers seeking interest on the amount due had come to its notice in the recent past.
What is more surprising is that the CSD keeps placing orders with the suppliers despite having a shortfall in the budget allocated for it. In the written answer to a question the MoD said, the payment is released after 30 working days, from the date of delivery of goods, subject to budgetary allocation and availability of the funds.
The MoD further claimed that efforts are being made to obtain full budgetary allocation to clear the outstanding dues.
