Noting that the Army inventory management has a key role in the country’s defence preparedness, a parliamentary panel has recommended the government to dispose of the large volume of “non-moving” items, streamline the procurement process, and initiate “strict action” against those causing procurement delays.
In a report tabled in the Lok Sabha on Thursday, the Public Accounts Committee (PAC) said that with the Indian Army managing a humongous inventory of approximately 4.5 lakh items, it is imperative that the lacunae ailing the inventory management be urgently plugged and the process streamlined.
It pointed out that a whopping 31 per cent of authorised inventory of the three central ordnance depots comprised non-moving items – items which have neither been demanded nor issued for more than five years, including obsolete, obsolescent and surplus items.
The committee is “alarmed to note that the value of 22.44 per cent of non-moving inventory (where rates were available) in the central depots was Rs 272.05 crore along with non-moving/surplus inventory valuing Rs 32.50 crore,” it stated.
The panel committee enjoined the Defence Ministry to streamline the processes of procurement to reduce delays and recommend that strict action be taken against every echelon/individual accountable for any delay in the process of procurement, particularly for fixing eligibility and technical criteria, specification changes, trials and for documentation, according to the report.
It also asked the ministry to apprise it of the action taken against defence public sector undertakings (DPSUs) and ordnance factories for slippage in meeting the targets.
“The Committee desire that the existing monitoring mechanism be made more stringent and expert teams be constituted for training/upgrading specifications to expedite procurement,” the report said.
The PAC report said that a performance audit was conducted to assess the efficiency of the supply chain management of central ordnance depots in meeting the requirements of the Indian Army between 2014-15 and 2018-19, and the committee observed from findings that there were instances of both deficiency and surplus in Class A stores. The committee also observed from audit findings that there were discrepancies in data relating to Class B stores.
Provisioning for Class A stores (major and minor equipment and ammunition) is done at the Army headquarters and for Class B stores (related to spares, accessories, general stores and clothing) at the central ordnance depots.
The committee is of the considered view that inventory management has a key role to play in the defence preparedness of the country.
The committee stated it is being highlighted since 2000 by audit, while on one hand major resources such as storage space and manpower of these depots were engaged in maintaining a large quantum of ineffective inventory, on the other hand depots were facing shortage of accommodation and serviceable stores were lying in the open.
“The Committee are disappointed to note that despite a lapse of more than 23 years, the problem of deficient storage accommodation has not been resolved yet. The Committee note from the ministry’s reply that while there has been an urgent necessity to create and modernize the storage infrastructure, due to budget constraints, fructification of projects of modernization has been taking considerable time,” it said.
“The Committee urge upon the Ministry/Army to carry out an extensive review of their inventory and dispose of non-moving inventory which would bring down holding costs and also free up storage space. The Committee desires that ISO certifications of storage management also be referred/adhered to and SOPs for managing stocks are prepared and followed,” it stated said.