Govt Aims To Curtail Shenanigans at NDDB through Amendments in the Act
Moneylife Digital Team 24 January 2022
The Union government has decided to amend the National Dairy Development Board (NDDB) Act to address the acts of errors and omissions and a flagrant violation of the spirit and the letter of the law in the existing Act. The department of animal husbandry and dairying under the Union ministry of fisheries, animal husbandry and dairying, states the amendment is proposed for better management and monitoring of the functions of NDDB and has invited comments from the public. Over the past few years, Moneylife has, over a series of articles, brought to light the shenanigans at NDDB. 
According to whistle-blowers and insiders, the government’s decision to amend the NDDB Act is undeniably a consequence of the rampant disregard for moral and ethical conduct, ducking probity in public affairs and tucking misdeeds under opaque and confusing reporting, especially by people who headed the board over the past two decades. 
“It is a story of an overwhelming desire to run the affairs of NDDB, a national statutory body, as a private fiefdom and evading the compliance of Right to Information (RTI) Act and Central Vigilance Commission (CVC) Acts in its subsidiaries, transferring NDDB’s public funds to its subsidiaries and illegally rendering such funds and its use beyond accountability under the NDDB Act and the RTI and CVC Acts!” they say.
The proposed amendments are directly and specifically meant to address the acts of errors and omissions by those who headed the statutory body over the past two decades. (Read: How NDDB Granted Rs22.28 Crore under NDP to a Non-Operationalised Milk Producer Company During Dilip Rath’s Tenure)
The most important amendments proposed in the NDDB Act are fixing the tenure of directors for a term of three years or up to the age of 65 and no person is allowed to hold the office for more than two terms. The NDDB board is mandated to furnish to the Union government a report of details of all its activities and projects undertaken with the funds provided by the government. (Read: NDDB Chief Dilip Rath Retiring This Month, Leaving Several Questions Unanswered on His Appointment Itself
As per the amendment proposed in Section 43 of the NDDB Act, nominee directors on the NDDB would also be ex-officio directors on the boards of subsidiaries companies (of NDDB). Further, it is barred from setting up any subsidiary company and transferring any part of its share capital to any person without prior approval from the government. (NDDB subsidiaries). (Read: Exclusive! Mother of Dairy Sham. Where Have NDDB’s 16 Subsidiaries Vanished?
In Section 43, three new Sections are being inserted to make applicable provisions of the CVC Act and the RTI Act to NDDB and all its subsidiaries.
All subsidiaries are mandated to submit activity reports and financial statements every quarter to NDDB. On policy involving public interest, other than related to technical and administrative matters, the Union government can give binding directions to NDDB. (Read: Moneylife Impact: Minister Giriraj Singh Gets Tough with NDDB; Asks about Rs200 Crore Given to NDS)
As reported by Moneylife, Mother Dairy Fruit and Vegetables Ltd (Mother Dairy or MDFVPL) and NDDB Dairy Services (NDS), the two subsidiaries of NDDB, suddenly reported losses through two consecutive financial years.
Especially during FY2018-20, Mother Dairy incurred a loss of Rs261.95 crore, out of which almost Rs190.85 crore are due to provisioning against deposits made in Infrastructure Leasing and Financial Services (IL&FS). On the other hand, NDS, in which NDDB had invested about Rs200 crore, has earned a profit of just Rs72 lakh over the past 10 years, shows a reply given in the Lok Sabha. (Read: Why NDDB Subsidiaries Mother Dairy and NDDB Dairy Services Incurred Losses in Past 2 Years?)
In February 2020, the ministry of corporate affairs (MCA) had ordered an enquiry into the loss-making Mother Dairy. (Read: MCA Orders Investigation of Mother Dairy; 2 Directors Resign
As Moneylife has pointed out, while an audit of the National Dairy Plan had begun in 2020, NDDB itself and its subsidiaries continued to escape comptroller & auditor general (CAG) scrutiny by using one strategy or the other. In fact, this resistance has been on for well over a decade.  
Consequently, NDDB’s subsidiaries also escaped scrutiny despite the many controversies and questions over the use or misuse of funds that have been reported by Moneylife over the past year or more (see list at the bottom of this article). 
In December 2021, Parshottam Rupala, minister for fisheries, animal husbandry and dairying, told the Rajya Sabha that “The CAG has undertaken the audit of national dairy plan phase I (NDP I), which was implemented by NDDB through a network of end implementation agencies (EIA). CAG provided a draft para on wasteful expenditure for one of the sub-projects on pilot doorstep artificial insemination (AI) delivery services. Pointwise clarification has been provided to CAG by this department in consultation with NDDB.”
To put things in perspective, the CAG audit was pending for over 10 years, even after the Delhi High Court had issued a clear order a decade ago. 
Further, the minister informed the upper house that his ministry had requested the department of economic affairs (DEA) to issue the necessary directions to CAG for getting the accounts of NDDB audited. “The HC of Delhi in its judgment dated 27 January 2010 has accepted the position of the government that the CAG can audit the accounts of NDDB under section 14(2) of the CAG Act. Accordingly, this department has requested CAG for auditing the accounts of NDDB vide letter dated 13 March 2020.”
“What the amendments signify is that the flexibility and freedom that had been provided to NDDB and stated upfront in the preamble to the existing NDDB Act will stand withdrawn, only because a bunch of people with vested interests desecrated and vitiated the NDDB Act over the last two decades!” the whistle-blowers and insiders say, adding, “But will the guilty get punished and held accountable? Even if they are no longer at the helm of affairs? By now, they may have managed to extinguish the trails leading to their illicit and illegal actions as well as their pecuniary and ill-gotten gains.”
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5 months ago
NDDB offices was shifted to Delhi as Artificial Intelligence laden Baboos wanted to be Play thing and they flayed it now to cover up amendments ... take it back like Air India
5 months ago
Thank you Rath for driving the last nail in Dr. K's coffin!
Kamal Garg
5 months ago
It is unclear whether such amendments would prove to benefit the actual working and operations of NDDB or it is one more ploy on the part of this government to have control over semi/quasi institutions/companies/sector so as to milk them for their benefit.
5 months ago
Govt Aims very illogical sudden change and amendment , vested interests for close govt benefactors to take control nothing so profound, current goovt only amending destroying suiting its own crony businessmen nothing has really dveloped in rcent years
5 months ago
My opinion the initiative to amend the NDDB Act and punish the fraudulent persons in position is a Very Good initiative by Government. Heartily welcomed.
5 months ago
Surprising that it took so many years to plug the lacuna and similar to this there will be lot of them which also needs to be addressed.How did this go unnoticed for so many years and looks like people at the helm of affairs turned a blind eye towards the irrgularities.With so many money going waste and hope they are recovered in due course of time.
5 months ago
slide started withthe demise of Dr. Kurian. it increased when HQ shifted to Delhi making it play thing of sovereign socialist like Air India .Baboos are mikkin dry the milch cows
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