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  • Cashew Development Corporation: At a Crossroads of Denial and Embrace

    Aug 14th, 2015

    When the Kerala State Cashew Development Corporation (KSCDC) and the government will weaken the cashew sector, which was once a thriving industry. It is high time the inefficiencies that have crept into the system are addressed.

    The public nature of the industry is under court scrutiny after recent incidents of financial misappropriation by the management of the Corporation. The Kerala State Cashew Workers Apex industrial Cooperation Society Ltd (Capex) was on the verge of losing its factories to private hands after a recent ruling by the Supreme Court. The KSCDC, which is the biggest public cashew company, is staring at another challenge. The facts and opinions regarding the functioning of the Corporation can hardly justify the continued government support to it without scrutiny by the finance department.

    The hunger strike by the INTUC state president and chairman of KSCDC R Chandrasekharan against the UDF government, which has managed to get support from former CPM state secretary Pinarayi Vijayan, was called off after the Cabinet agreed to infuse Rs 30 crore in addition to the Rs 165 crore it had already infused into the company. But, the hunger strike on behalf of 12000-odd workers was opposed by various sections of the people. Trade union leaders, cashew workers and leaders within the Congress and the UDF are opposed to any more government funding to the Corporation in the light of the series of reports against the management. The UDF government itself has infused more than Rs 165 crore in the last four years. Even then, the number of working days in the factory has reduced considerably and many workers are yet to get gratuity for five years, PF contribution for over a year or last year’s bonus from the Corporation.

    The expenses of the Corporation tells a great deal about how public money has been used for purposes other than the benefit of the employees and the Corporation. “Over Rs 55 lakh was spent by the Corporation on advertisement against the government. Had the Corporation distributed the money among poor workers, each would have got at least Rs 5,000,” said a prominent leader of the UDF.

    The finance department found this out and asked the chairman and members of KSCDC to bear the cost from their pockets. CPM leader and former minister in charge of the cashew industry P K Gurudasan said that the government was responsible for the mismanagement of KSCDC. He was a member of the committee on public undertakings in 2012 that sought to probe the corruption at KSCDC . CITU national vice-president Mercykutty Amma, who has been in the forefront of the worker’s strike in front of the KSCDC factories demanding their opening, said that the Corporation was run in a corrupt manner and there should be a probe to bring out the culprits.

    “Even the people among us do not understand the gravity of the issue. There is a need to bring in efficiency and the workers should get more job days with the help of timely funding of the government,” said Mercykutty Amma. Nepotism, a point alleged against the Corporation by the likes of Mercykutty Amma, featured prominently in the report submitted by the finance secretary and additional chief secretary K M Abraham to the High Court. The report sought to remove the chairman and the managing director. The case was filed after 12 reports against KSCDC management did not yield any change in its functioning, said the petitioner Kadakampally Manoj.

    Former finance secretary E Somasundaram and CAG made critical comments against the Corporation. Department of Industries and IT principal secretary P H Kurian, in his report to HC in June, pointed out that the long term prospects of the KSCDC and CAPEX were extremely grim if its working model is not overhauled.

    The downslide of KSCDC

    ■ Govt fund during UDF govt- Rs 165 cr

    ■ Govt funding since 2005- Rs 380 cr

    ■ Loss of KSCDC till 2012 (last audited)- Rs 1237 cr

    ■ From 2005 (since KA Ratheesh became the MD) the loss has crossed Rs 700 cr

    ■ No of workers in 1980s - 50,000

     ■ No of workers at present- around 12,000