Canteen Stores Department (CSD) Price Fixing Policy
The CAG report said that the main objective of CSD is to provide consumer goods of high quality to the troops at a price cheaper than the prevailing market rates.
As per the pricing policy issued by the Ministry in October 1977, the selling price is based on “Into Warehouse Cost” which should include the inward freight, transportation charges, insurance, and other incidentals besides the profit of approximately one to 12 percent.
A pictorial price-list containing photographs and the prices of the items is published twice a year by CSD. A review of the price catalogue indicated that CSD was able to provide goods to the consumers at rates cheaper than market rates. However, several cases of incorrect application of pricing policies came to notice during the audit as discussed below:
Fixing the price of the goods/ articles in an unfair manner
In C&AG’s Performance Audit report, several cases of incorrect application of pricing policies were noticed. Taking note of the shortcomings /deficiencies pointed out by Audit, PAC in its 48th report, recommended that the Ministry should impress upon CSD to fix the prices of goods/article in a fair and transparent manner taking into consideration the actual cost incurred and the existing taxation provisions so that the intended benefits accrued are passed on to the beneficiaries.
Accordingly, CSD in January 2013 proposed a reduction of freight and packaging element in the pricing structure, which was concurred by CDA (CSD) in January 2014 as detailed in a statement indicating details of pricing elements proposed for reduction.