Canteen Stores Department (India)

The Canteen Stores Department ('CSD') is a solely own Govt of India Enterprises under Indian Ministry of Defence'. 'Its Head office is located at Adelphi 119 MK Road Mumbai-400020 and has its Depot Sub-Depots in all major military bases operated by the Indian Armed Forces. CSD sells a wide variety of products like household provisions, kitchen appliances, alcoholic drinks, cars, sports equipment. Though originally meant exclusively for active and retired members of the Armed Forces personnel (defined as Troops) it is slowly and steadily being expanded to include GREF, NCC Units at Group HQ level, TA units, CDA's staff, Indian Ordnance Factories, Embarkation HQs, Civilians paid from Defence estimates as well as civilians paid out of civil estimates and Paramilitary forces under operational/administrative control of the Army civilian govt employees. Generally, these goods are procured by CSD in bulk, and sold at concessional rates, compared with retail prices. A huge profit is earned by the Canteen Stores Department.

The CSD has grown from a turnover of Rs. 4.8 million in 1948 to over Rs. 2.7 billion in 1998–99 – a growth of over 4500 times. Turnover per employee in 1998–99 was Rs. 12.2 million. Mandated to serve active(serving soldiers: appx 1.3 million)as well as retired armed forces personnel (appx 2.8 million) i.e. appx 4.1 million (04.1 million)people it is serving 16 million people – 5% of India's population which can afford consumer items and durables( due to inclusion of civilian govt employees paid out of Defense Estimates as well as Civil Estimates. The CSD's profits are transferred to private funds namely Regimental Funds of the regular military establishments. For civilian departments such as CDA,CSD Depot, such profits are paid as dividend to the govt / Adhoc employees as extra enumerations. A very small portion is returned to consolidated funds of India. The CSD has a very low ratio of operating expenses to turnover – 1.30% – perhaps the lowest in any organization in the country. With 33 Area Depots and 3400 Unit-Run-Canteens(URCs), the CSD serves the services in all the parts of the country – from Ladakh in the North, Tamil Nadu and Kerala in the South, Nagaland in the East, Rajasthan in the West and even Port Blair. Govt Transports are frequently used to transport CSD goods to the CSD canteens to keep the operating cost to the minimum.

The CSD maintains an inventory of 2800 items that cover a wide range, from shoe laces to cars. The CSD has 'Bi-annual Sales cum-After-Sales Melas' at its Area Depots which includes items not in the CSD's inventory. Unit commanders however are free to negotiate with the local manufacturers / Dealers to include any item of their choice to maximize sale to the captive troops vis-a-vis profits. Canteen Stores Dept under the Ministry of Defense is ever ready to provide soft loans to the CSD canteen outlets which are considered private entities.It caters not just to the services personnel and their families but also to GREF, NCC Units at Group HQ level, TA units, CDA's staff, ordnance factories, Embarkation HQs, Civilians paid from Defence estimates and Para-military forces under operational/administrative control of the Army. Chief of Amy Staffs over the years at the behest of Min of Defence (BOCCA) had published Army Orders to allow many civilian staff/ est to run their own CSD canteens as those civilians are working very positively for the welfare of the troops.It is the only department in the Ministry of Defence where defence civilians are actually serving in forward and high altitude areas, shoulder to shoulder with the combatant personnel of the Armed Forces.

Historical background
To trace the history of the organization, it is necessary to understand its origin. The origin of CSD is essentially set in the British era when Army Canteen Board in India was established as an offshoot of the Navy and the Army Canteen Board in the UK. While the latter was abolished in 1922 in the UK, and was replaced by NAAFI (Navy, Army and Air Force Institute), its counterpart in India continued till 1927. The Army Canteen Board in India was established mainly to provide canteen facilities to British troops in India through grocery shops and bars run by canteen contractors.

The achievements of NAAFI in the UK did not inspire any corresponding change in India. However, the Army Canteen Board, liquidated in 1927, was replaced by the Canteen Contractors' Syndicate (CSS). It floated in the form of a limited company, under government control with its registration office at Karachi. This company started off with a paid-up capital of Rs 600,000 only. The shareholding was confined to the canteen contractors. The CSS functioned with reasonable efficiency until the commencement of World War II.

However, after the heavy build up of the British troops in India, the CSS could no longer cope-up with the situation. Therefore, on 1 July 1942, the Government of Dependent India brought the canteen services under the Directorate of Wholesale Trade and Indian Canteen Corps to handle the retail trade in operational areas. Canteen suppliers poured in from abroad and the organization functioned extremely well during the War. By 31 March 1946, it was not only able to pay back to the government the assignments of funds made available to it but could also function on its own trading capital. However, with the end of the War and homeward movement of the British troops, the import facilities dwindled and the turnover of the organization shrank. With the pulling out of troops from the operational areas, the Indian Canteen Corps was disbanded and the staff retrenched.

This was closely followed by the independence and partition of the country, and the war -time organization gave birth to two Canteen Stores Departments, i.e., CSD India and CSD Pakistan. The retail trade, however, reverted to the contractors. A board of Liquidation was formed to oversee the liquidation of assets of the war-time organization which ceased to function from 31 December 1947.

The Canteen Stores Department, the present organization, thus took birth on 1 January 1948 with a working capital of Rs 4.8 million assigned to it from assets of its predecessor war-time organization. The Government of India had granted the organization a life of three years on experimental basis. The retail outlets i.e. the Unit Run Canteens selling CSD goods to the troops however continued to be with the civil canteen contractors. The situation was reviewed in 1950 and the Department was accepted as a government undertaking on a permanent basis. Unit Run Canteens, the retail arms of Canteen Department however retained by the Civilian Contractors.

After a few years military commanders were able to convince the civil representatives namely the Govt of India of the need to take over the Retail outlets by the regular military units from the civil contractors and to utilize huge profits earned for the welfare of troops. Thus the concept of Unit Run Canteens (URCs) was born and is being run very profitably for the Military Commanders at all levels and seen expanding exponentially.

Evolution of activities
Business practices of CSD have evolved over the years and are based on profitability and commercial exploitations. The development of these practices have always kept the objective of the organization in view. The department procures consumer goods and consumer-durable products in bulk directly from suppliers and positions them at 33 Area Depots(acting as whole sale depots), spread all over the country, for meeting the requirements of over 3500 URCs which function as retail outlets. Many of the URCs are located in remote/inaccessible parts of the country.

It is relevant to highlight the salient differences in the purchases made by us and the other government departments. While the other Government departments make purchases for their own consumption and utilisation and make no profits, the CSD purchases stores for whole sale retailing. As CSD provides access to a large market and being a department of the Government and because of the bulk orders and assured payments, a large number of suppliers are interested in doing business with the Department. CSD has an all-India spread infrastructure but it works within the parameters stipulated by the Government, as public funds are involved. However there are some are some glaring lapses in the whole operation as has been highlighted by the CAG in its report to the PAC( Parliamentary Action Committee).