Not mere corruption, its mass murder: Priyank Kharge presents data on scam by BJP during COVID-19
Bengaluru: In a detailed post on social media on Sunday, Karnataka’s Minister for Rural Development and Panchayat Raj, Priyank Kharge, alleged massive profiteering and misuse of funds by the previous BJP government in Karnataka during the COVID-19 pandemic. Kharge’s post provides a breakdown of events and decisions he claimed led to excessive spending on personal protective equipment (PPE) kits and other essentials, often at inflated costs and through questionable procurement practices.
Kharge presented a chronology starting from March 17, 2020, when the then BJP government approved a procurement budget of Rs. 416.48 crore for drugs, medical equipment, chemicals, and consumables to combat the COVID-19 pandemic. The next day, on March 18, 2020, the Department of Health and Family Welfare's Need Assessment Committee approved the purchase of 1,20,000 PPE kits at a rate of Rs. 2,117.53 per kit. Kharge questioned why the government opted for this rate, explaining that the high cost was based on quotations from suppliers Big Pharmaceuticals and DHB Global, a Hong Kong-based company.
According to Kharge, despite government officials advising a short-term tender process, the BJP government cited an emergency situation and opted for a direct approval process, bypassing standard procedures. The procurement file was sent directly for approval to the then Chief Minister B.S. Yediyurappa, bypassing the need for competitive bidding.
On April 2, 2020, the BJP-led government reportedly placed a direct order for 1,00,000 PPE kits from DHB Global at Rs. 2,117 per kit, totaling Rs. 21.18 crore. Soon after, on April 10, an additional order for another 1,00,000 kits was placed with DHB Global at Rs. 2,104.53 per kit, amounting to around Rs. 21 crore. The same day, a third order was placed for 1,00,000 kits from Big Pharmaceuticals at Rs. 2,049.84 per kit, valued at Rs. 20.5 crore.
In total, the government ordered 3,00,000 PPE kits from DHB Global (2,00,000 kits) and Big Pharmaceuticals (1,00,000 kits), at a cumulative cost of roughly Rs. 62.5 crore. The terms of these orders mandated delivery within seven days, inclusive of transportation from Hong Kong to Bengaluru, with payments due upon delivery.
Kharge highlighted that on April 6, 2020, just days after the initial purchase order, the government issued a corrigendum altering the terms. This change required the state to bear transportation costs from Hong Kong, which added Rs. 11.99 crore for DHB Global’s shipments and Rs. 9.35 crore for Big Pharmaceuticals, pushing the total transportation expenditure to approximately Rs. 21.35 crore. Furthermore, the government approved a 100% advance payment to these companies, despite earlier stipulations of payment only upon delivery.
Kharge criticized the decision to source kits from foreign companies when local options were available at lower costs. According to records from the Karnataka State Medical Supplies Corporation Limited (KSMSCL), the organization had procured over 18 lakh PPE kits at prices ranging between Rs. 333 and Rs. 1,445 per kit. On March 14, 2020, KSMSCL reportedly bought 1,50,000 kits from Plasti Surge Industries Pvt Ltd at Rs. 333.40 per kit. However, on March 27, a corrigendum revised the price to Rs. 725 per kit without justification.
Similarly, on March 24, 2020, KSMSCL acquired 2,000 kits from Indus Bio Solutions at Rs. 656.25 per kit. Later, on April 23, 2020, records show procurement of kits from eight other local suppliers at Rs. 1,444.80 per kit. Kharge raised concerns about these price discrepancies, questioning why local suppliers, offering kits at significantly lower rates, were not prioritized over the foreign suppliers.
Kharge questioned the necessity of opting for Chinese firms when local suppliers were available, asserting that the decision benefitted particular entities. He noted that DHB Global, a company founded in 2019, closed operations shortly after securing the PPE contract, suggesting that it was selected under dubious circumstances.
According to Kharge, the inflated prices led to substandard medical equipment, contributing to the high death toll during the pandemic. He alleged that this mishandling was part of a pattern of profiteering, accusing the BJP government of downplaying the real COVID-19 death toll for political gains.
Backing his claims, Kharge referenced figures from the Directorate of Economics and Statistics, which indicated 2,69,029 deaths from January to July 2020 and 4,26,943 deaths in the same period of 2021, pointing to an increase of 1,57,914 deaths in Karnataka. However, BJP’s official records attributed only 37,206 deaths to COVID-19. Kharge claimed this discrepancy suggested a potential understatement of 1,20,708 COVID-19 deaths by the BJP government.
Kharge concluded by labeling these actions as “mass murder for profit,” suggesting that the BJP government’s actions during the pandemic extended beyond mere corruption. He argued that the COVID-19 expenditure of Rs. 18,000 crore warrants scrutiny, with the PPE procurement worth approximately Rs. 80 crore representing only a small portion of what he described as a larger corruption scandal. Kharge assured that the current Congress government in Karnataka would investigate the matter and seek justice for those affected by the previous administration's alleged negligence and greed.
PM @narendramodi ji, your BJP Govt made profits in pandemic.
— Priyank Kharge / ಪ್ರಿಯಾಂಕ್ ಖರ್ಗೆ (@PriyankKharge) November 10, 2024
Chronology samajhiye:
17.3.2020: BJP Govt approves purchase of drugs, chemicals, medical equipment, and consumables for 416.48 cr
18.3.2020: The Need Assessment Committee of Dept of Health & Family Welfare approved… pic.twitter.com/haxvma6egw
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Rs 30,000 cr loss a month: Oil companies bleed as fuel prices on hold amid global energy spike
New Delhi (PTI): About Rs 700-1,000 crore loss per day. Rs 30,000 crore every month. India's state oil companies are quietly absorbing a massive financial hit to keep petrol, diesel and LPG prices unchanged even as global energy markets face a turmoil that is bigger than all previous crises combined.
While countries from Japan to United Kingdom have raised petrol and diesel prices by up to 30 per cent since the start of the West Asia conflict, fuel prices in India continue at two-year-old levels.
The war disrupted India's import of 40 per cent of crude oil (raw material for making petrol and diesel), 90 per cent cooking gas LPG and 65 per cent natural gas (used to generate electricity, make fertilizer, turned into CNG and piped to household kitchens for cooking), but state-owned oil companies have maintained uninterrupted fuel supplies with no rationing or shortage at any point in the last 10 weeks.
But this has come at a cost - Rs 30,000 crore under-recovery or loss every month for the three oil marketing companies - Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), two sources with direct knowledge of the matter said.
The under-recoveries - the gap between input costs and realised retail prices - rose sharply in March/April before tapering a bit. Daily under-recoveries during April were estimated at about Rs 18 per litre on petrol and Rs 25 per litre on diesel, translating into average losses of Rs 700-1,000 crore a day for OMCs, they said.
At a news briefing on developments in West Asia, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, said prices in the international markets, on which India relies to meet 88 per cent of its oil needs, have been volatile and supplies impacted.
Crude oil prices which were around USD 70 per barrel two months ago, are now at USD 120, she said. "It has been government's endeavour to keep prices stable so far and that there is no price increase for consumers," she said. "This has hit finances of OMCs... monthly under-recoveries are of the order of Rs 30,000 crore."
She, however, refused to say if retail petrol and diesel prices will continue to hold.
"As I said, the endeavour so far has been to see that there is no price increase," she said.
The three oil marketing companies (OMCs) have worked overtime to keep the supply lines running even when demand spiked due to panic buying.
The government intervention included excise duty reductions and absorption of part of the fuel cost burden. The special additional excise duty on petrol was cut to Rs 3 per litre from Rs 13, while excise duty on diesel was reduced to zero from Rs 10 per litre.
The under-recoveries would have swelled to nearly Rs 62,500 crore had the government not cut excise duty on petrol and diesel by Rs 10 per litre each.
The government, Sharma said, has taken a hit of Rs 14,000 crore a month in cutting the excise duty.
The Centre's effective absorption at peak crude prices was estimated at around Rs 24 per litre for petrol and Rs 30 per litre for diesel.
The February 28 strikes by the United States and Israel on Iran triggered a sharp escalation in West Asia tensions. Energy prices surged as the conflict widened and shipping risks intensified in the Strait of Hormuz - the shipping lane through which India and other countries imported crude oil, LPG and natural gas from Gulf countries. Tanker movement was disrupted.
The companies also faced additional costs from emergency crude sourcing, higher freight charges due to vessel diversions, elevated marine insurance premiums and refinery optimisation expenses. Despite these pressures, fuel and LPG supplies remained uninterrupted across the country.
The surge in crude prices and the decision to shield consumers from higher retail prices placed significant strain on OMC balance sheets and refining margins, sources said.
They added that the measures reflected a policy decision to prioritise consumer stability and economic continuity during a global energy shock.
Sources warned that a prolonged period of elevated crude prices could lead to higher working capital borrowings and force some recalibration of capital expenditure plans. However, investments linked to refining expansion, energy security infrastructure, ethanol blending, biofuels and transition fuels would continue with government backing, they said.
India's approach contrasted with measures adopted by several other economies, where fuel prices rose sharply after the conflict-driven energy shock.
Petrol prices increased by about 34 per cent in Spain, 30 per cent in Japan, Italy and Israel, 27 per cent in Germany and 22 per cent in the United Kingdom, according to estimates. Several countries also introduced rationing, conservation advisories, emergency relief packages or fuel caps.
In India, petrol prices remained Rs 94.77 per litre and diesel at Rs 87.67, with no rationing, mobility restrictions or supply disruptions, they added.
Sharma said the revenues that OMCs earn are used to buy crude oil, build infrastructure to process it into fuel and create channels that will take the fuel to consumers.
Their capex spending is all dependent on the revenues they earn, she added.
