Canteen Stores Department (India)

Canteen Stores Department
State-owned
Industry Retail
Predecessor
  • Army Canteen Board
    (until 1927)
  • Canteen Contractors' Syndicate (CCS)
    (1927-42)
  • Directorate of Wholesale Trade and Indian Canteen Corps (1942-47)
Founded 1 January 1948 (1948-01-01)
Headquarters Adelphi, 119 Maharshi Karve Road, Mumbai, Maharashtra, India[1]
Area served
 India
Owner Ministry of Defence
Website csdindia.gov.in

The Canteen Stores Department, (CSD), is a solely owned Government of India Enterprise under Indian Ministry of Defence. Its head office is located at Adelphi 119 MK Road Mumbai-400020 and has its depot sub-depots in all major military bases operated by the Indian Armed Forces.

CSD sells a wide variety of products like household provisions, kitchen appliances, alcoholic drinks, cars, and sports equipment. Though originally meant exclusively for active and retired members of the Armed Forces personnel (defined as troops), it is slowly and steadily being expanded to include GREF, NCC Units at Group HQ level, TA units, CDA's staff, Indian Ordnance Factories, Embarkation HQs, civilians paid from defence estimates, civilians paid out of civil estimates, and Paramilitary forces under operational/administrative control of the Army civilian government employees. Generally, these goods are procured by CSD in bulk, and sold at concessional rates (without taxes), compared with retail prices. CSD prices are low as the goods sold are exempt from taxes. A huge profit is earned by the Canteen Stores Department.[2]

The CSD has grown from a turnover of Rs. 4.8 million in 1948 to over Rs. 2.7 billion in 1998–99 – a growth of over 4500 times. Turnover per employee in 1998–99 was Rs. 12.2 million. Mandated to serve active (serving soldiers: appx 1.3 million) as well as retired armed forces personnel (appx 2.8 million) i.e. appx 4.1 million (04.1 million) people it is serving 16 million people – 5% of India's population which can afford consumer items and durables (due to inclusion of civilian government employees paid out of defense estimates as well as civil estimates.

The CSD's profits are transferred to private regimental funds of the regular military establishments. For civilian departments such as CDA, CSD Depot, such profits are paid as dividend to the government / ad hoc employees as extra enumerations. A very small portion is returned to consolidated funds of India. The CSD has a very low ratio of operating expenses to turnover – 1.30% – perhaps the lowest in any organization in the country. With 33 Area Depots and 3400 Unit-Run-Canteens (URCs), the CSD serves the services in all the parts of the country – from Ladakh in the north, Tamil Nadu and Kerala in the south, Nagaland in the east, Rajasthan in the west, and even Port Blair. Government transports are frequently used to transport CSD goods to the canteens to keep the operating cost to the minimum.

The CSD maintains an inventory of 2800 items that cover a wide range, from shoelaces to cars. The CSD has 'Bi-annual Sales cum-After-Sales Melas' at its Area Depots which includes items not in the CSD's inventory. Unit commanders however are free to negotiate with the local manufacturers and dealers to include any item of their choice to maximize sale to the captive troops vis-a-vis profits.

Canteen Stores Department under the Ministry of Defense is ever ready to provide soft loans to the CSD canteen outlets which are considered private entities. It caters not just to the services personnel and their families but also to GREF, NCC Units at Group HQ level, TA units, CDA's staff, ordnance factories, Embarkation HQs, civilians paid from defence estimates and Para-military forces under operational/administrative control of the Army.

Chief of Army Staffs over the years at the behest of Min of Defence (BOCCA) had published orders to allow many civilian staff to run their own CSD canteens as those civilians are working very positively for the welfare of the troops. It is the only department in the Ministry of Defence where defence civilians are actually serving in forward and high altitude areas, shoulder to shoulder with the combatant personnel of the Armed Forces.

History

The Canteen Stores Department traces its origins to the British Raj, when the Army Canteen Board was established in India as an offshoot of the Navy and the Army Canteen Board in the United Kingdom. Although the Navy and the Army Canteen Board was abolished in the UK in 1922, and was replaced by the Navy, Army and Air Force Institutes (NAAFI), its counterpart in India continued to function until 1927. The Army Canteen Board in India was established mainly to provide canteen facilities to British troops in India through grocery shops and bars run by canteen contractors.[3]

The Army Canteen Board was liquidated in 1927, and replaced by the Canteen Contractors' Syndicate (CCS). It was floated in the form of a limited company, under government control with its registration office at Karachi (present-day Pakistan). This company started off with a paid-up capital of ₹6 lakh (US$8,900) only, and the shareholding was confined to the canteen contractors. The CCS functioned with reasonable efficiency until the commencement of World War II.[3] However, after the heavy buildup of the British troops in India, the CCS could no longer cope-up with the situation. Therefore, on 1 July 1942, the Government of India made use of the specific provision in Services (India) under the Directorate of Wholesale Trade and Indian Canteen Corps to handle the retail trade in operational areas. Canteen suppliers poured in from abroad and the organization functioned extremely well during the War. By 31 March 1946, it was not only able to pay back to the government the assignments of funds made available to it but could also function on its own trading capital. However, with the end of the war and homeward movement of the British troops, the import facilities dwindled and the turnover of the organization shrank. With the pulling out of troops from the operational areas, the Indian Canteen Corps was disbanded and the staff retrenched.[3]

This was closely followed by the independence and partition of the country, and the wartime organization gave birth to two Canteen Stores Departments, i.e., CSD (India) and CSD (Pakistan).[3] The Pakistani CSD would later bifurcate further to form CSD (Bangladesh), after the independence of Bangladesh. The retail trade, however, reverted to the contractors. A board of Liquidation was formed to oversee the liquidation of assets of the war-time organization which ceased to function from 31 December 1947. The Canteen Stores Department, the present organization, thus took birth on 1 January 1948 with a working capital of ₹48 lakh (US$71,000) assigned to it from assets of its predecessor wartime organization. The Government of India had granted the organization a life of three years on experimental basis. The situation was reviewed in 1950 and the Department was accepted as a government undertaking on a permanent basis.[3]

Unit Run Canteens, the retail arms of Canteen Department however retained by the Civilian Contractors. After a few years military commanders were able to convince the civil representatives, namely the government of India, of the need to take over the retail outlets by the regular military units from the civil contractors and to utilize huge profits earned for the welfare of troops. Thus the concept of Unit Run Canteens (URCs) was born and is being run very profitably for the military commanders at all levels and seen expanding exponentially.

Organization structure

The governing body of the Canteen Services in India is the Board of Control for Canteen Services (BOCCS) which is headed by Defence Minister. Other of the Board are the Defence Secretary, the Secretary Defence (Finance), the Quarter Master General (QMG), the COP (Naval HQ), and the AOA (Air HQ). The Board is assisted by an Executive Committee of BOCCS while the day-to-day management of CSD is controlled by the General Manager CSD, who is ex-officio Chairman of the Board of Administration. The General Manager (of the rank of Major General) is assisted by two Joint General Managers, seven Deputy General Managers, 18 Assistant General Managers, 5 Regional Managers and 34 Area (Depot) Managers and other Officers.[4]

Operations

The CSD is headquartered at Adelphi, a six storey building Churchgate Station in Mumbai. Adelphi houses the office of the Chairman Board of Administration and General Manager of CSD and all leading functional departments including Management Services, Secretariat Branch, Finance & Accounts, Personnel & Administration, Electronic Data Processing, and the Stores Branch (GS, LIF and AFD sections).[4]

Unit Run Canteens (URCs) are shops operated by the CSD that sell products to authorized consumers.[5] There are thousands of URCs across India. The CSD has 34 depots strategically located across India. This places the company's operations in close proximity to the thousands of URCs it has mandated to serve. The depots are the hub of the CSD chain. Earlier, all supplies to these Depots were routed through the Base Depot in Mumbai, however, due to the expansion of the operation, suppliers are now given the option to supply locally to Depots closest to their manufacturing/supply centres. This has reduced lead time and improved overall operation of the Department. [4]

Products

The CSD trades in seven basic product groups.[6] The CSD obtains products from more than 500 suppliers including multinationals, large Indian companies and small manufacturers. Except for Group VII, all products are procured based on demand from URCs. Products in Group VII can neither be stored at URCs nor can they be shelved. Therefore, the CSD procures these items from the trade on behalf of the end user "Against Firm Demand" (AFD).[4]

Evolution of activities

Business practices of CSD have evolved over the years and are based on profitability and commercial exploitations. The development of these practices have always kept the objective of the organization in view. The department procures consumer goods and consumer-durable products in bulk directly from suppliers and positions them at 33 Area Depots (acting as wholesale depots), spread all over the country, for meeting the requirements of over 3500 URCs which function as retail outlets. Many of the URCs are located in remote/inaccessible parts of the country.[7]

It is relevant to highlight the salient differences in the purchases made by us and the other government departments. While the other government departments make purchases for their own consumption and utilisation and make no profits, the CSD purchases stores for wholesale retailing. As CSD provides access to a large market and being a department of the government and because of the bulk orders and assured payments, a large number of suppliers are interested in doing business with the department. CSD has an all-India spread infrastructure but it works within the parameters stipulated by the government, as public funds are involved. However, there are some glaring lapses in the whole operation as has been highlighted by the CAG in its report to the PAC (Parliamentary Action Committee).[7]

See also

(a) 87th Parliament Report of a Committee on Subordinate Lagislation had categorically mentioned that URC employees must be treated like any other Government employees and accordingly requested MOD to frame the governing rules for URC employees. 

(b)	The Comptroller and Auditor General of India has strongly recommended in its Performance Audit Report No. 14 (2010-2011) of on Canteen Stores Department Ministry of Defence, Chapter II, Audit of Unit Run Canteens (URCs) that “the URCs should be recognized as the retail outlets integral to CSD. The operational results of the URCs should be disclosed in the proforma accounts of CSD to provide a true and fair view of the complete operations of the organization. Ministry of Defence should take immediate steps to bring the URCs under the accountability regime that is applicable to all operations funded by the Consolidated Fund of India”.

(c) Recommendations of Public Accounts Committee vide PAC Report No. 48 (2011-12) and Action Taken Report (ATR) No. 75 (2012-13) that the financial parameters Services must be harmonized with financial principles of the Government and the URCs be brought under the unified accountability regime so that they do not escape the unremitting the Parliamentary financial oversight. The committee also recommends that the Government should urgently frame suitable terms and conditions of service and provide reasonable pay scales and promotional avenues for the employees of the URCs.

(d) The Judgment of the Honourable High Court, Kerala, by a Division Bench dated 19 Oct 2015 on Case No. WA No. 1759 of 2013 in WP (c) 32100/2011 against the Judgment of a single bench in WP (C) 32100/2011 dated 12/9/2013 in the case of Indian Naval Canteen Service Employees Union and Others Vs Union of India, Secretary Min of Defence and others held that the activities carried out in a INCS Canteen comes under the definition of State as per the provisions given in Article 12 of the Constitution. The Honble Court has also ruled that since INCS employees have already been given the benefits of 3rd, 4th & 5th Pay Commission, the employees should be paid 6th Pay Commission benefits as well. In this scenario, it is pertinent to mention here that the functioning of INCS as well as 4500 URCs is indistinguishable and both the institutions draw the CSD items from the same Depot. In order to maintain parity within the establishments come under the Min of Def, it is requested to kindly consider URCs as well under the definition of State and the benefits of 6th Pay Commission may kindly be remunerated to the employees of URCs also in consonance with the Order of the Hon’ble High Court at the earliest. A copy of the aforesaid judgment is enclosed for ready reference.

It can be seen from the above reports/rulings that nothing has been done to look into the pay fixation and other related matters concerning the Unit Run Canteens and URC employees. CSD (I) employees and certain other Govt. industrial workers performing the identical work are not being equated with URC employees and this differential treatment between similar work employees is illegal.

References

  1. ↑ http://www.csdindia.gov.in/ecatalogue/contacts_management.aspx
  2. ↑ http://www.google.co.in/#hl=en&source=hp&biw=1020&bih=541&q=www.csdindia.gov.in&btnG=Google+Search&aq=1&aqi=g3&aql=&oq=www.csdindia&fp=fdaaf9dac29f4003
  3. 1 2 3 4 5 "Canteen Stores Department-History Origin". Csdindia.gov.in. Retrieved 2014-03-14.
  4. 1 2 3 4 http://csdindia.gov.in/content.aspx?id=5
  5. ↑ http://csdindia.gov.in/content.aspx?id=8
  6. ↑ http://csdindia.gov.in/content.aspx?id=7
  7. 1 2 http://books.google.co.in/books?id=nxwE_n1z0NQC&pg=PA54&dq=Canteen+Stores+Department&hl=en&sa=X&ei=l8chU8PHNcOVlQWw94D4Bg&ved=0CD4Q6AEwAQ#v=onepage&q=Canteen%20Stores%20Department&f=false

External links

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