Bengaluru: A liquor scam may be brewing in the Unit Run Canteens (URC) of the Canteen Stores Department (CSD) of the armed forces, if observations of Comptroller and Auditor Deneral of India (CAG) are any indication.

In its 38th report on Performance Audit of Defence Services-Army covering the period July to November 2015, the CAG has noted excessive drawals of liquor by URCs, and expressed apprehension that the excess liquor, over and above the sanctioned requirement, could make its way into open market.

The CSD of the Army is responsible for providing quality consumer goods, including liquor, at rates cheaper than the market rates to the armed forces personnel and defence civilians.

CSD had an annual turnover of over Rs 15,000 crore during 2015-16. Through its chain of one Base Depot and 34 Area Depots serves as the Wholesaler and the retail operations are carried out through about 4,000 URCs. These URCs, some of which are in remote areas, in turn sell these goods to the ultimate beneficiaries. Liquor at CSD outlets are sold at nearly half the market price, as excise duty is borne by the government or the suppliers.
In its previous Performance Audit of CSD carried out in 2008-09 too, CAG had made observations about excess drawal of liquor by the URCs.

The Ministry in the Action Taken Note submitted to PAC in December 2011 stated that by resorting to several measures like raising liquor indent strictly in accordance with the strength of the URCs, sale of liquor through smart cards and taking strict disciplinary action against the delinquent personnel, effective control was being exercised to prevent the leakage of liquor meant for defence personnel to civilian market.

“However, in spite of such assurances, cases of excess drawal continued as it was observed from the details furnished by URCs that 20 out of 35 URCs had drawn liquor in excess of their entitlement. Such excess drawal during the period from November 2013 to January 2014, November 2014 to January 2015 and November 2015 to January 2016 worked out to 5,14,369 units of liquor. Even with a minimum base price of Rs 100/-21 per unit, the total cost of such excess drawn liquor worked out to Rs 5.14 crore,” CAG observed.

The CAG report also observed that URCs were obtaining the liquor licence from Excise Department based on the posted strength of the Service Personnel which limits the maximum drawal.

“As service personnel are issued liquor only based on their entitlement, there is a strong possibility that the excess drawn liquor could be illegally sold in the open market or to unauthorized persons,” CAG noted.

It cited an example. “Based on complaint of illegal sale of liquor in Civil Market meant for Defence Personnel at Delhi, Court of Inquiry found that 1,55,502 units of liquor were drawn in excess of entitlement and out of this 97,432 units was sold to unauthorised personnel during February to April 2011.”