Supplyco in financial crisis, on the verge of shutdown
Thiruvananthapuram: The government-owned company the Kerala State Civil Supplies Corporation Limited (Supplyco) is on the verge of shutdown due to huge liabilities caused from giving subsidies. The company was pushed into crisis after the Left wing fulfilled their election promise that price of 13 subsidised products will not be increased for the next five years.
The loss of Supplyco was Rs 431 crore in the previous financial year and Rs 210 crore upto November this financial year. With the outstanding amount remaining, the suppliers also refrained from providing the products. Following this, the supply centres including Maveli Stores do not get sufficient stock.
The UDF government had fixed the subsidy price of products 20 percent less than the market price. When LDF came to power, they maintained the price rate. The price of coconut oil was low when LDF came to power. Rs 90 was charged for 1 kg coconut oil per each card. Now coconut oil costs more than Rs 200 in the market, but Supplyco still sells it for Rs 90 suffering a loss of Rs 100 crore.
The previous government used to sell 5 kg Jaya rice per card for Rs 25 per kg. Even when its market price reached about Rs 50, 10 kg rice was provided for Rs 25 rate. The price of sugar also was held at Rs 22. The company suffered a loss of Rs 200 crore for the subsidy of sugar and coconut oil only.
The suppliers refused to provide products due to the outstanding amount. They also do not attend the tenders for the past four months. In addition to the subsidy amount, Supplyco is yet to receive Rs 105 crore for distributing flood relief kits for three months in the flood affected areas. The suppliers did not distribute goods in the last months of relief as the amount was not settled.
About Rs 130 crore worth paddy collected by Supplyco was destroyed in the flood. They will get an insurance coverage of Rs 50 crore and another Rs 25 crore can be earned by selling the destroyed paddy. They have to suffer the loss of remaining Rs 55 crore.
Minister for Food and Civil Supplies P. Thilothaman said that the financial crisis of Supplyco will be brought to the attention of chief minister and finance minister. Former government had granted Rs 70 crore for managing the market. LDF government has been providing Rs 200 crore each for the past three years. Also there are plans to reduce expense and increase revenue, he said.