Can CSD be Made Self Sustaining?

Earlier a diktat was issued by the CDS Gen Bipin Rawat that Indian Army officers will not be able to buy high-end cars through CSD. One fails to understand that if they have the purchasing power, why one need to deny the privilege granted to them by the Govt of India.

Such actions are detrimental for the automotive industries and they should write to this gentleman and ask him to take away such "Chamre ke Sikke orders" as we have to find the ways and means to kick start the economy.

A viewpoint is being given here that how we can make the CSD self sustaining. 

When CSD started a century back there was no other option but to fund it from govt sources. This has continued to this day. Whilst earlier there was the problem of procurement, movement, funds, banking, accounting, etc none of these issues exist today.

The govt has kept a budget of 21000 crores for CSD. This is not required today. But it is for vested interest. To make personal money using rules and govt funds. All decisions of what item to introduce and pricing is with the MoD through CSD Hq.

Units place a demand on dependent depots. They get the stores on full payment in advance. Nothing can be returned unless a universal problem is found in the product. The CSD depots deposit this money in the GoIs CSD account. Then comes the ugly face of Indian bureaucrats. They make payments to the vendors. Now Rs 21000 crore in circulation. Delay payment by a few weeks to the vendors. What happens. Everyone knows. Even if 0.5 percent is transacted as speed money its over 10 crores.

Now comes the GST issue. Yes the govt gets 50 percent GST only from sales through CSD. But if they increase the sale of CSD by 100 percent they will recover the loss. Who loses. No one. The economy runs, manufacturers make money, the units have more QD funds, Service Hqs have more welfare funds, the beneficiaries of CSD are happy. But no. The 10 crore, or more is important for the bureaucrats and approvers of this decision, the middleman in this case.

Simple solution. Manufacturers supply many many times more to the trade. Hundreds and thousands of times more. They give credit for one to two months. They can do the same for CSD very easily because there will never be a default. The payments can go directly to vendors, the GST to the govt, the QD to various stakeholders. But no. The 10 or 20 crore payoff is more important.

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