Now, budget crisis forces Army to abandon sales of cars

Army rep-ADGPI Representational image | File

After uproar over the letter of the Principal Controller of Defence Accounts (PCDA) for citing its inability to process claims by Army officers going on courses, assignments and postings due to lack of funds, now the Canteen Stores Department under the Ministry of Defence has suspended sales of automobiles "due to budget crunch".

"In light of the budgetary constraint, it has been decided to temporarily suspend four-wheeler and two-wheeler sales at all the depot with immediate effect. For resumption, separate instructions will be issued on availability of funds," a letter issued from the headquarters of the Canteen Stores Department stated on February 6 (Wednesday). Canteen Stores Department provides rations and household goods at subsided rates for armed forces and defence officials. 

READ: Army has no money to pay for travel

According to an estimate, close to 5,000 CSD stores have an estimated annual turnover of more than Rs 12,000 crore, with over 3,000 products available at concessional prices. Cars are, probably, the most expensive item which can be bought through CSD.

Unlike other consumer goods and items, available over the counter, cars are bought through authorised automobile dealerships only. But the process and payments are routed through CSD Car Cell Unit and the pricing is calculated at virtually negligible tax rates as against state VAT.

Following order from the CSD headquarters, army headquarters has issued an order to its commands and units directing beneficiaries not to process cars and two-wheeler indents and not to deposit any amount with CSD account and dealers. However, the Army expects that the situation would be normal by April 1.

On Monday, PCDA, the agency responsible for payment of salary and allowances and all claims of Army officers, embarrased the defence ministry by declaring it will no longer process claims by Army officers under travelling allowance due to insufficient funds under the relevant heads.

The issue created a lot of unrest among the military fraternity, as they feared that it would not only affect the day-to-day working of the army, but also would create a fresh rift in civil-military relations. The embarrassed ministry not only asked the PCDA to remove the order from its website, but also came out with a statement that there was no dearth of  funds for paying temporary and permanent duty allowances to the Army personnel.

"At times, however, the allocated funds to the specified head, which is based on predicted or envisaged expenditure may fall short of the actual expenditure. These shortfalls are only temporary and are resolved through routine re-appropriations," the MoD statement had claimed on the PCDA order.

Similarly, in November, PCDA had rejected temporary duty claims of several officers for staying in hotels. PCDA raised objection over officers not submiting the required non-availability certificate from the authority. PCDA has issued instructions that "availing hotel accommodation by the officers should be the last resort". It added that officers should preferably stay in circuit houses, messes, government guest houses, inspection bungalows, etc.