Saturday, September 10, 2016

MP's Dalia scam; Feasting on the malnourished

Rakesh Dixit

A major income tax department operation in July set off stunning revelations as to why Madhya Pradesh continues to be among top two states in India in child malnutrition despite spending billions of rupees on public nutrition distribution system.  
Madhya Pradesh is second after Bihar in malnutrition with 42.8 % children being severely undernourished. Worse, Infant Mortality Rate (IMR) at 51/1000 is highest in the state in India, according to 2015-2016 National Family health Survey (FHS ) report.
The IT operation, carried out for three days in 30 locations in Bhopal, Indore and Mumbai, blew up the lid on what has come to be known as multi-billion Dalia scam.
Senior Congress leader and former Madhya Pradesh chief minister Digvijay Singh raised the Dalia scam in the Rajya Sabha on August 18. He dared Prime Minister Narendra Modi to get the scam probed into, adding the fund which was misused was of the Centre’s Integrated Child Development Scheme (ICDS).  
‘ The Congress will file Public Interest Litigation (PIL) in the Supreme Court to unravel the scam and lodge an FIR against the culprits’, Singh said. 
The Shivraj Singh government is trying hard to hush-up the scam as many powerful bureaucrats, most notably the chief minister’s Man Friday SK Mishra, might land in trouble if murky details of the rip-off come to light.
SK Mishra wears many hats. He is principal secretary to the Chief Minister, Principal Secretary, Public Relations and also Managing Director of the Madhya Pradesh Agro Industries Development Corporation. The corporation, aka MP Agro, turned into a milk cow in 2008 after it secured the authority from the Woman and Child Development department to engage private companies for manufacturing and supplying nutritive Dalia and readymade food packets to Anganwaris across the state.
Nearly 93000 Anganwaries are mandated to distribute nutrition to pregnant women, malnourished children at their centres. The supplied food packets are also distributed among schoolchildren as part of mid-day meal.
The MP Agro along with three companies —MP Agro Nutri Food, MP Agro Food Industry and MP Agrotonics Limited—monopolises the food chain supply and manufacturing. The four entities function in joint venture where MP Agro’s holding is 30% and the companies’ holding is 70%. Earlier the equity share between the corporation and companies was 51: 49 which was tilted in favour of the companies. Together they command annual budget of Rs 1200 crore.
The MP Agro Managing Director has a key role in deciding which company will get what share of the fund for manufacture and supply of prepared food. Stakes being so high, it is no wonder that  the Chief Minister’s most trusted officer has been entrusted with the task.
Before SK Mishra, another Shivraj Singh Chouhan’s blue-eyed bureaucrat Rakesh Shrivastava was the MP Agro Managing Director till 2014. Like Mishra, Shrivastava also held the post of Commissioner, Public Relations as additional charge. He was subsequently sent to Gwalior as Excise Commissioner. Recently Shrivastava was made Managing Director of MP Mandi Board.

According to those familiar with the MP Agro’s functioning, the two Managing Directors in their tenures systematically allowed the three holding companies to thrive at the corporation’s expense. In the bargain, billions of rupees allegedly changed hands over the last eight years. The corruption acquired a permanent mechanism with the MP Agro entering into five-year contract with the three companies for supply in 2012.
While the companies’ production and turnover increased exponentially, the MP Agro’s role correspondingly reduced. 
In 2005-06, MP Agro’s manufacturing plant in Badi near Bhopal produced 4775 metric tons of nutritive food. The production reduced to 1877 metric tons in 2008-09. In the same period production of MP Agro Nutri Food, one of the three private companies, grew from 3816 metric tons up to 11,019 tons. Other two companies also increased their production substantially.
Ironically, while annual budget for nutritive food continued to increase, the plight of malnourished children in the state deteriorated steadily.  
The budget for diets was Rs 90. 6 crore in 2004-2005. It went up year after year to touch Rs 1200 crore in 2015-16. But the annual budgetary growth miserably failed to address malnutrition.  
At present, the number of malnourished women and children in Madhya Pradesh stands at roughly 97 lakhs in the state’s 8 crore population.
Given stunning enormity of the mismatch between the budgets and benefits to the targeted beneficiaries, it is not difficult to surmise that political patronage from the top emboldened the two Managing Directors to subvert the system with gay abandon.
According to sources, a gang of well-entrenched officers in the MP Agro played the role of facilitator for three private companies. That the gang had backing of the Managing Directors goes without saying. Of the gang, four officers stand out from the rest. They are MP Agro general manager Ravindra Chaturvedi, nutrition in charge Venktesh Dhawal, ICDS officers Akshay Shrivastava and Harish Mathur.

Chaturvedi, who joined the MP Agro in 1984 as deputy manager, has been on the forefront in thwarting every move to bring transparency in the corporation. He was appointed director in the contracted companies as the MP Agro representative.  Despite several department enquiries, he enjoyed full blessing of the MDs and acted as an interface between them and the company owners. Dhawal, who sets MP Agro’s agenda for food manufacturing and supply, had retired on June 30. But MD SK Mishra retained him by reappointing on contract.
The July income tax raids covered premises of Chaturvedi and Dhawal.
Raids were also conducted at the premises of nutritive food suppliers Sunil Jain, Hridyesh Dixit and Avadhesh Dixit. The Dixit brothers also own a media group. Besides, Jain and Dixits have also invested a substantial sum in real estate business in the name of Shrikrishna Devcon Private Limited. The company has housing projects in Indore and Mumbai. The investigation wing seized large volume of documents from 30 locations of MP Agro Industries, MP Agro Nutri Foods, MP Agrotonics, Indo Den Food, Shri Krishna Devcon Limited, (SKDL), Global Group and their allied companies situated in Indore, Barwah, Bhopal and Mumbai.
Sunil Jain and Mukesh Jain are directors in MP Agro Nutri Foods. Avadhesh Dixit heads Global Group which deals in real estate.
All the three families and the companies they run have close financial ties, documents accessed by income tax department revealed. Together, the three families are into three types of businesses. Besides supplying cereals to Anganwadis and developing real estate projects, they have entered into renewable energy sector

Although the income tax raids were essentially conducted to unearth tax evasion, the documents seized by the sleuths turned out to be damning evidence of the massive corruption jointly indulged in by the MP Agro bureaucrats and the three companies.
The income tax department has concluded its operation after making the Dixit brothers’ companies to surrender Rs 50 crore. Hridyesh Dixit alone surrendered Rs 5 crore after much dilly- dallying.
But follow-up action on the Income tax department report by the state government is still awaited.
AK Jaisawal, director general, investigation, Income Tax (MP) says the department has sent information about irregularities in quality of nutrition food to the concerned department.
MP Agro managing director SK Mishra says that the corporation will act against the officers covered in the raids after the income tax report is received. The officers –Chaturvedi and Dhawal—were MP Agro nominees in the MP Nutri Food company, whose premises were raided. 
Two months have elapsed since the I-T operation but no action by either the state government or the MP Agro has followed.
Although the Women and Child Development Minister Archana Chitins has promised that “ no one will be allowed to get scot free for eating up the nutrition meant for the  children”, her department has not taken any initiative so far. Chief Minister Shivraj Singh Chouhan has not spoken a word on the massive operation that blew the lid on the Dalia scam.
Notwithstanding the government’s attempts to shield the guilty, a sordid saga of corruption has followed in media on the trail of the income tax raids.
And the details suggest that thousands of state’s children may have survived severe malnutrition if a corrupt Shivraj Singh Chouhan government had not let a nexus of politicians-bureaucrats-contractors rob billions of rupees meant for their diets served at the state’s nearly Anganwaris. Culpable genocide of the survivable kids has been the tragic outcome of the wanton avarice of the nexus comprising successive Women and Child Development (WCD) department ministers and bureaucrats of the MP Agro, besides owners of three nutritive food manufacturing companies.
The state’s WCD department allocated a whopping Rs 7800 crore to the MP Agro to get nutritive food prepared for distribution to malnourished children through Anganwaris over the last 12 years. The MP Agro, in turn, got the nutritive prepared in the manufacturing units of three companies—MP Agro Nutri Food, MP Agro Food Industry and MP Agrotonics Limited.
Chief operators of the four entities together allegedly compromised both quantity and quality of the nutritive food to as high as 60%, according to an expose by Dainik Bhaskar.
Simply put, they mutually conspired to gobble nearly 60% of the allocated fund—roughly Rs 4680 crore—which could have prevented thousands of avoidable deaths of malnourished children.
Statistics of malnutrition deaths in Madhya Pradesh for the first six months of this year alone reflect enormity of the massive crime against humanity, not to mention corruption.
Between January 1 and June 30 this year, 9167 children died of malnutrition in the state. Maximum 78773 malnourished children have been identified in tribal district of Dhar, followed by Badwani (58,781) and Alirajpur (40,107). Even in the state capital, Bhopal, number of malnourished children in the 0-6 age group is over 26000.
In the last six months maximum 587 malnutrition deaths were reported in Bhopal, followed by Badwani( 537), Balaghat ( 268), Betul ( 332), Chhatarpur (219), Guna (200), Jabalpur ( 276), Jhabua (251), Katni (212),Morena (226), Satna ( 346), Sehore (236),Seoni ( 256), Shivpuri (211), Ujjain ( 301) and Vidisha (341).
Many of these deaths could have been avoided had the Woman and Child Development department ensured strict monitoring of quality and quantity of the supplied food items.
Quality check is a mere formality. Only recently, food packets of expired date were recovered in Rewa district. Food manufactured in January was being distributed in June.
As per the ICDS instructions, each normal child is entitled to get food worth Rs 6. For women it is Rs 8 per head and for a malnourished child Rs 9 per head. But the instructions are mostly followed in the breach for want of strict checking mechanism being in place.
The food supply system has a vast network of district project officer in each of 51 districts, 453 block level projects and 3100 supervisors. Each   supervisor has 25 Anganwaris under his/her jurisdiction. They are supposed to send demand at higher level based on actual requirement.
But corruption starts from the lowest level. For example, if an Ananganwari sent demand for one gunny sack of food items, the demand is multiplied by up to four times at the woman and child directorate level in Bhopal. Inflated demand helps fudging billing and payments.
Practice of undersupply of the food packets is also rampant. Suppose two trucks of material is despatched from Bhopal. It will be shown as four truck material. The directorate will make payment for four trucks on the basis of forged receipts. 
Another means of corruption is misreporting of children in Anganwaris. On paper, each Anganwari has 100 children registered but in most of them hardly 20 to 25 children are fed. However,  billing for food is made for 80 to 90 children.
Bogus billing in transportation is yet another way to make illegal profit. Normally, transporters rate is Rs one to Rs 2 per kg of food supply. But most of them charge as high as four times the stipulated rates. The difference in the billing is shared by transporters and officials from bottom to top.
All bills for supply are cleared by the directorate. Rules provide that bills up to Rs 2.5 crore will be cleared by the directorate. For bills exceeding this amount, files will move to the finance department. To avoid sending files to the finance department bills of higher amount are split in such way that each bill does not exceed the limit of Rs 2.5 crore and thus gets cleared at the directorate level itself. 

For a callous state government such an endemic malnutrition and resultant deaths may be cold statistics. But viewed against the backdrop of the revelations that followed the income tax raids, a chilling narrative of corruption, conspiracy and defiance of the Supreme Court order emerges. 

The narrative goes like this.

Madhya Pradesh is, historically, the most malnourished state in India. The government of India and World Health organisation (WHO) send huge money every year under various schemes, particularly under the Integrated Child development scheme (ICDS) to mitigate the problem. State’s WCD department also earmarks substantial amount to provide diets to malnourished children and pregnant mothers through Anganwaris. The huge fund attracts contractors. The WCD department enters into contracts with them for supplying readymade nutritive food, mostly Dalia, to the Anganwaris. The arrangement spawns massive loot which contractors share with venal WCD ministers and bureaucrats. Baring sporadic complaints of corruption in the media from time to time, the nexus endures even as millions of children and pregnant mothers remain malnourished   or even die due to this for want of adequate diets.
Gradually, the corruption in centralised nutritive food supply becomes too endemic across India for certain public spirited non government organisations (NGOs) to keep quiet. They petition the Supreme Court for directive. The apex court in October, 2004, rules against the centralised, contractual system of nutritive food supply to Anganwaris.  Instead, the court orders the state governments to deposit the fund meant for the diets in the joint accounts of Anganwari workers and presidents of the self-help groups ( SHGs) working at the grassroots level.
The court verdict jolts the contractor-WCD officialdom’s monopolistic control over the funds meant for Anganwaris. By the time the court verdict comes, the BJP government has ousted the Digvijay Singh-led Congress government. A new set of contractors is jockeying for nutritive food manufacturing and supply. Their lobbying succeeds. They manage to make the WCD minister sit on the Supreme Court order for two and half years. But defiance of the order for long is not possible in the face of the NGOs who are warning to move contempt petition in the Supreme Court.
Eventually, the WCD minister implements the court order in January 2007 only to revert to the old arrangement a year later.
So, since 2007 till now the restored centralised system continues to work till the income tax raids in July exposes the scam. 

On the face of it, the narrative looks uncomplicated. However, when we insert dramatic personae and their roles in it, enormity of the scam would appear mind-boggling.
Let us take first take Dixit brothers whose 20 premises in Bhopal, Indore and Mumbai were raided by a 300-strong team of income tax department sleuths. They own MP Argo Nutri Food, one of the three companies in joint venture with the MP Agro. Situated in Mandideep near Bhopal, the company’s turnover is said to be Rs 100 crore, though in the I-T sleuths’ estimation it could be much higher.
Hridyesh Dixit, the billionaire owner of several companies, had started off his career in late 1989 as a journalist with Rs 450 salary in a small newspaper in Indore. . Both his father Mohanlal and mother Shanta Devi were school teachers in Indore where the would-be billionaire grew up in a lower middle class milieu.
SauvĂ© and ambitious, Hridyesh started to make a mark as a reporter and, four years later, he joined Dainik Bhaskar in Indore. 
A year later, he moved to Bhopal in the same newspaper.  In the state capital, his ambitions to rise in journalism began to sour as he made contacts with politicians and bureaucrats. The corrupt ecosystem in Bhopal was too alluring for him to resist. He showed no qualms in leveraging his burgeoning contacts to feather his nest. The shameless quest for make-it-rich-by-any-means endeared him to the owners of the publications wherever he moved as journalist.
In Bhaskar, Hridyesh was a darling reporter for the owner Sudhir Agrawal. Dixit maintained his flair for endearing himself to owners as he moved from Bhaskar to electronic media –first in the Zee News and then Sahara. The success stories of Subhash Chandra and Subrat Roy inspired him to become a media owner himself.
By 2010, Hridyesh had earned enough money to start his own evening paper Pradesh Today from Bhopal. In the last six years, the paper has eight editions in MP, Chhattisgarh, Rajasthan, Uttar Pradesh, Delhi and Gujarat. 
“ It was my ambition to become a media king and not remain just a journalist. My dream is to make my media house number one in India with multimedia ownership,” Hridyesh told a Bhopal-based website Bichchu.com which did his profile sometime back.  
Phenomenal rise of an ordinary reporter to a billionaire media baron in two decades has dazzled not only journalists but also political and bureaucratic circles. The astonishing journey is also reflective of the acute susceptibility of the BJP government to corrosive manipulation by unscrupulous people. Hridyesh stands out as one of the shrewdest manipulators of the system.
While still a journalist, Hridyesh had got into the supply business with the state government. His thick relations with the then health director Ashok Sharma helped Hridyesh enter into the medicine supply network. Hridyesh roped -in his relatively low-profile brother Avadhesh into the drug supply.
But a series of income tax raids at the premises of those linked to a multi-crore drug supply scam in 2008 forced the Dixit brothers to look for other channels for making money. The raids were conducted at the premises of Hridyesh Dixit apart from the then Home Secretary Rajesh Rajora , the brother of the then Health Minister, Ajay Vishnoi, health director Ashok Sharma and many others. Ashok Sharma was later dismissed. Sharma is said to be Dixit’s business partner in the media group. 
Having been blacklisted by the Health department, the Dixit brothers focussed on manufacturing and supply of nutritive food .  Initially, their quantum of supply order was small. But, by and by, they manipulated the system in such a way that within a few years their company MP Nutri Food became one of the three main suppliers of nutritive foods.
Kusum Mahadele , the then WCD minister played a major, if dubious ,role in ensuring that the contractors such as Dixit brothers and others do not lose their ride on gravy train due to the Supreme Court’s order in October 2004 directing decentralisation of the food supply chain.
 Ms Mahadele, who is now jail minister in Shivraj cabinet, sat on the court order for two and half years.
In January 2007, the then leader of opposition late Jamuna Devi raised objection to the Supreme Court order in the state assembly.  The Congress leader, who was WCD minister in the Digvijay Singh cabinet, protested the provision of depositing money for diets into joint account of Anganwari workers and self help groups. Her contention was that government fund cannot be transferred into the accounts of non government persons. Jamuna Devi’s contention was music to Kusum Mahadele’s ears. The minister promptly promised the Congress leader to do her bidding.
 Ms Mahadele’s department implemented the minister’s assurance in the house within eight days. In her alacrity to implement the order, the minister did not bother to put up the decision before the state Cabinet for ratification. Nor did she seek mandatory approval for the same from the finance department.   
Interesting, the WCD cited another Supreme Court order to justify reversion of the court’s previous order for decentralisation.  The supreme court in 2007 had ruled that in the interest of the targeted children, it was imperative that tenders for nutrition supply were not invited every too often.
The court order not only came handy for the WCD department to restore the centralised supply system but also to involve the MP Agro in the supply chain.
Soon, the MP Argo signed contract with the three manufacturing companies. It was also decided that the MP Agro will start its own plant but the idea was shelved under pressure of the contracted companies.
Centralised supply system was steeped in corruption. As a result nutritive food reached both in less quantity and in poor quality in Anganwaris.
Social activist Sachin Jain says contractors and private companies have dominated food supply to Anganwaris  from the very beginning in contravention of the Supreme Court’s 2004 verdict.
Jain, who was appointed advisor to the Supreme –Court-appointed commissioners for study of malnutrition in Madhya Pradesh, points out that his NGO had moved to the Madhya Pradesh high court aganst the WCD department decision to retain the old contractual system.
“ On our petition the state government assured the court that  it was ready to ensure supply of food items through self help groups for four days in a week. But that assurance was not followed,” Jain recalls.        
As complaints about inadequate supply from project officers at block to district levels reached the Integrated Child Development Scheme office, a senior officer drew the state government’s attention to irregularities in 2008.  
In his note-sheet the officer pointed out to the state government gross opaqueness in the supply system. He also raised suspicion over the dubious manner of payments to the companies. The note sheet created flutter in the bureaucrat-contractor nexus which succeeded in getting the officer removed, using political clouts.
Ranjana Baghel, who is now state BJP vice president, succeeded Kusum Mahadele in 2008 as WCD minister. The new minister protected the nexus with more vigour than her predecessor. She vehemently scuttled an attempt of an ICDS officer to bring transparency in the system. 
The officer had said in a note sheet in 2008 that supply of the food items be handed over to districts so that they could decide quantum of food distribution on the basis of actual requirement from each Anganwari under their jurisdiction.
The minister’s angry response to the officer’s request was that he was creating obstacles in smooth functioning of the system which was improper. That was the last –and unsuccessful—attempt to put the corruption-ridden system back on track.

Tinu Joshi, the infamous IAS officer presently in jail, went a step further in favouring the three companies.
During her tenure as Principal Secretary of Woman and Child Development department in 2010, the tender contract was changed as per the company's wishes.
" During a meeting, she instructed the department officials not to indulge in politics over tender specifications. She instructed to change the share to 30:70 from 51:49 per cent," according to a senior official of the department.

During her tenure, the manufacturers used to test their samples in their own labs, which as per Central guidelines should be tested by the Food and Nutrition Board (FNB). The officer appointed to examine the food quality never reported any lapses.
In February 2010, IT teams recovered Rs 3 crore cash from the house of Tinu and her IAS husband Arvind Joshi. The two officials were suspended and their services terminated. They are currently in jail.