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Niranjan Takle
Niranjan Takle


Milking them dry

  • Milk and no money: The Worli Dairy in Mumbai. Mismanagement of milk cooperatives has caused huge losses to Mahanand | Janak Bhat
  • Slow progress: Several Mahanand units are operating below their installed capacities.

The rot in milk cooperatives in Maharashtra has cost the government Rs.8,000 crore

In 2013, the Union government asked the Mehsana District Milk Cooperative in Gujarat and Indian Farmers Fertiliser Cooperative Ltd to give cattle-feed free of cost to farmers affected by a severe drought in Maharashtra. As the largest dairy cooperative in India, Amul, too, sent cattle-feed to help the Maharashtrian farmers.

Leaders of the Nationalist Congress Party, which was ruling Maharashtra along with the Congress, sensed an opportunity to score political points. They decided to distribute the cattle-feed through Mahanand, the federation of milk cooperatives in the state. A function was organised at Katraj Dairy in Pune, which ended up costing Mahanand Rs.80.04 lakh. “The details of the expenses shown to have been incurred are shocking and unbelievable,” said activist Shri Naik. “It’s a clear case of blatant corruption.”

Apparently, Rs.51.84 lakh was spent on printing “banner, backdrop and advertisements in print and electronic media”. Said Naik: “Rs.10 lakh was shown as spent on travels of district coordinators, Rs.5 lakh towards expenses by ‘seniors’ for travel and stay in Delhi, Rs.1.5 lakh for conveyance, tea and food on the day of the function, and Rs.20,000 for refreshments for 1,000 people who attended the function.” Documents in possession of THE WEEK show that an additional Rs.10 lakh was spent for building the stage and renting audio equipment for the function.

Naik has written to the governor, the chief minister and the dairy development minister demanding investigation of the many scams in Mahanand. “According to information received through RTI, the scams are worth a total of Rs.8,000 crore,” said Naik. “Lakhs of poor farmers and consumers have suffered because of the blatant corruption of NCP leaders.”

Documents with THE WEEK show that Mahanand was selling eight lakh litres of milk every day in Mumbai in 2005. With increase in population and rapid urbanisation, the figure was expected to double in ten years. But it did not. In fact, the sale dropped to two lakh litres a day in 2015. “The board of directors, in connivance with bureaucrats, deliberately opted for policies that ended up causing huge losses to the apex cooperative [Mahanand] in terms of money and sale,” said Naik.

He said Mahanand raised its selling rate by Rs.20 a litre in 15 years, but gave only Rs.1 to distributors and Rs.10 to milk producers, collectors and transporters combined. Mahanand kept its market price higher than that of competitors like Amul and Mother Dairy, causing a continuous drop in its sales.


Despite the continuous decline in milk collection and sales, Mahanand proposed a project to manufacture Tetra-fino, aseptic packs specially designed to package milk, at Goregaon in Mumbai. It received a grant of Rs.28 crore under the National Agriculture Development Programme and Rs.23.91 crore from the National Dairy Development Board for the project. “It floated a tender worth Rs.22 crore, but increased it to Rs.35 crore by showing various additional expenses,” said Naik. “The Rs.18-crore project for dairy products is still not operational. The cost of the original Rs.34-crore milk powder project at Pune went up to Rs.80 crore. It is still not complete.”

Vishwas Patil, the managing director of Mahanand, recently wrote to all directors of the federation and its member societies: “It is mandatory that all member societies supply their milk collection/production to Mahanand. But only 29 of 105 member societies are doing it. Many directors and member societies are engaged in promoting their own private brands and nobody is supplying milk to Mahanand as per the quota decided. This is a serious violation of rules.”

Today, the Tetra-fino unit is operating at only 9 per cent of its installed capacity. Said Sandeep Amane, deputy registrar of cooperatives: “It can’t function because milk cooperatives of 17 member directors don’t supply even a drop of milk to Mahanand. How will the plant work with no milk?”

According to Naik, some of the member societies supplied milk at higher rates to Amul, Mother Dairy and other competitors. “These included societies of the directors,” said Naik. “Mahanand started buying milk from private dealers and dairies at Rs.3 to Rs.5 per litre more than the market price. This caused a loss of nearly Rs.40 crore.”

The BJP-led National Democratic Alliance government, which assumed office last November, recently ordered an inquiry into the matter. “We are going to take strict action,” said Revenue and Dairy Development Minister Eknath Khadse. “The investigation under section 83 [of the Maharashtra Cooperative Societies Act] is on, and the liability will be fixed under section 88 of the act.”

Advance payments made by Mahanand to some of its cooperatives and members have also come under the scanner. Bhum Taluka Milk Producers Society was given Rs.1 crore in advance even though it had stopped supplying milk to Mahanand and defaulted Rs.53 lakh in payments. Rajendra Suryavanshi of Udgir society received Rs.27 lakh in advance, while Ramakrishna Bangar of Patoda society in Beed district got Rs.75 lakh. “This [Patoda] society had a collection capacity of 10,000 to 15,000 litres a day,” said Naik. “But records show that it was supplying 90,000 litres a day.”

Documents with THE WEEK show that a tender worth Rs.170 crore for the renovation of the building Mahanand Niwas was awarded to a company called Nikhil Constructions. The same contractor was given additional work of Rs.15,87,230 in June 2013. “The contractor was close to an office-bearer of the union and, hence, he was favoured,” said Naik. “Once complaints were filed, Kavathekar [then deputy general manager of Mahanand] resigned. His resignation was immediately accepted without initiating an inquiry against him.”

Naik said a person named Savita Mane had filed a complaint with the Maharashtra Anti-Corruption Bureau alleging that Kavathekar had amassed wealth disproportionate to his known income. She also submitted evidence that showed that work orders worth nearly Rs.250 crore were issued during Kavathekar’s tenure. The dairy development ministry subsequently wrote to Mahanand, asking it to initiate an inquiry against Kavathekar. “But the directors didn’t,” said Naik.

In 2005, a PIL was filed against Shivaji Talekar, then managing director of Mahanand, alleging that he was involved in financial irregularities to the tune of Rs.400 crore. Talekar was later removed from the post and arrested. “But Mahanand’s board of directors didn’t cooperate with the investigating agencies and a charge-sheet for corruption worth only Rs.20 crore was filed,” said Naik.

Talekar and two former employees of Mahanand later started a private dairy. “Balasaheb Thopte and Dilip Thopte were class 3 and 4 employees of Mahanand till 1995,” said Naik. “They resigned and formed Anantkrupa, a private dairy with Talekar as partner.”

Anantkrupa set up a packing unit at Bhilarwadi in Pune and rented it to Mahanand. “That unit packs about 35,000 litres a day, but payment for 50,000 litres a day is made at higher rates. The Thopte brothers and their dealings with Mahanand and some of its directors need to be investigated by the Anti-Corruption Bureau,” said Naik.

The cooperatives department is looking into the spending of lakhs of rupees on ‘study tours’ undertaken by Mahanand directors. A report on Mahanand’s expenditure on vehicles shows that the federation spent Rs.17,68,097 in 2013-14 for cars meant for its chairman and vice chairman. “Mahanand bought expensive cars for the personal use of the dairy development minister and secretary,” said Naik.

Another report submitted to the governor of Maharashtra has more shockers. Mahanand’s Washi unit has an installed capacity to pack 60,000 litres a day. A contract has been signed with Amidev Agro Care to do the packing at Rs.1.66 a litre. But payment for one lakh litres a day is being made to the contractor. “Mahanand’s plant in Goregaon can pack one million litres a day, but is doing only three lakh litres a day,” said Naik. “The spare capacity at Goregaon plant can be used by cancelling the contract in Washi.”

According to him, the everyday functioning of Mahanand, from packing to purchase of equipment, is riddled with corruption. “Purchase of equipment worth hundreds of crores has been done in an extremely suspicious manner,” said Naik. “Every contract, be it for building plants or for packing milk, is fraudulent.”

It seems Khadse has begun the cleaning-up in earnest. He has dissolved the Mahanand board of directors and has appointed an administrator who will look after the functioning of the federation for the next few months. The state government has also referred the matter to the National Cooperative Dairy Federation of India, based in Ahmedabad. It seems the consequences will be serious for NCP leaders such as Ajit Pawar, who had for long been involved in running Mahanand.

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