Govt loses a third of Rs 357m distributed among cooperatives

KATHMANDU, Dec 2: The government has lost around a third of Rs 357 million it distributed among fair price grocery stores run by cooperatives, as more than 30 percent of those receiving the grant either never opened a store or have closed it down, shows preliminary investigation by the Department of Cooperatives (DoC).



This is the latest example of how the government is squandering money by giving it to poorly-regulated cooperatives in the country. The government had started distributing a grant of Rs 100,000 to each cooperative that showed interest to open a fair price grocery shop since fiscal year 2008/09.[break]



The program was introduced as per the budgetary announcement, under which the government promised the state support for at least one such cooperative-run store in every settlement with a population of 30,000. Within two years of the launch of program, a total of Rs 357 million was distributed among 3,570 cooperatives at Rs 100,000 each.



The government had assumed the support would generate employment opportunities and make necessary items like rice, pulses, salt, cooking oil and other similar commodities available at nominal prices, allowing consumers to beat the heat of inflation.



But the assumption has gone wrong as the data show many cooperatives have misappropriated the sum. The DoC has gathered progress reports of around 2,500 cooperatives that took away the grant amount so far although it had asked all of them to submit the report by the end of last fiscal year.



Interestingly, the DoC suspects that even the cases of misappropriation, which official statistics put at 15 percent, is under reported.



“We believe the total fund lost is much higher because some of the cooperatives that squandered away the grant amount threatened local district officers, who collect information, and coerced them to doctor the progress report,” a high-ranking official of the DoC told Republica on condition of anonymity.



To investigate the matter the government has just formed a three-member committee under the chairmanship of Sudarshan Prasad Dhakal, registrar of the DoC.



The committee, which comprises an official each from the Home Ministry and the Local Development Ministry, will investigate the total number of shops in operation, cooperatives that misappropriated the amount and others who had to close because of stiff competition.

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