Price ceiling on the purchase of four-wheelers from CSD due to budgetary constraint: Army Chief
Rawat added that vehicle purchases would therefore have to be managed within the existing budget.
Rawat was referring to last month’s army order, which placed a price cap and engine restrictions on the purchase of vehicles by officers, Junior Commissioned Officers (JCOs) and jawans. He made the comments while addressing a seminar of retiring army officers, said officials aware of the development.
Rawat also said that the entitled ration, which was restored last week for officers posted in peace stations, was removed earlier in lieu of a daily ration allowance, because of issues in distributing them and not due to bureaucratic hurdles.
The Army Chief also raised the issue of several instances of honey trapping of army personnel to extract confidential information. He added that the army will come out with a new policy on the use of smartphones, which will be more stringent on security protocols as compared to the previous ones.
Meanwhile, Rawat while commenting on the price ceiling for vehicle purchases through the CSD explained that a certain amount of money is annually allocated to CSD for buying the required products, including cars. The higher the cost of a vehicle means the higher the amount which is deducted from the budget, leading to compromising on buying essential items. “The chief said that due to the fund constraint a decision on placing the price ceiling was taken in view of the larger picture,” said an official.
Another official explained that the car sales last year overshot the CSD’s budget. The CSD annually receives around Rs 18,000 crore and out of this Rs 6,000 crore were spent on car sales in 2018.
Rawat added that vehicle purchases would therefore have to be managed within the existing budget. He also said that the move was also taken in view of the aspirations of JCOs and jawans to own vehicles. He explained that if an officer purchases a car which is above the newly implemented price cap then that much less opportunities are there for others to buy. “The chief had also said that if someone has the capability to buy a luxury car, then he can do it from the civil market,” said another official.
The army’s Quartermaster General branch in May had issued a letter, stating that from June 1 only vehicles with an engine capacity of upto 2500 CC and not costing more than Rs 12 lakh, excluding GST, will be available through the CSD for officers or personnel in pay level 10-18. JCOs and jawans were allowed to buy vehicles of engine capacity up to 1400 CC and not exceeding price of Rs 5 lakh, excluding GST. Earlier, there was no restriction on the capacity or price of vehicles that could be purchased through the CSD. The frequency of the purchase was also reduced to once in eight years from four years for officers. For the JCOs and jawans it remains the same, except that the period between the purchases of two cars was reduced to eight years from 10.
The policy caused some anger among the defence fraternity as it prevented them from buying several high-end SUVs. Some feel that especially JCOs and jawans have not benefited. “Earlier they could buy any top vehicle model they wanted. Now they can’t. And the frequency of buying still remains the same for them, except for the gap between two vehicle purchases,” said an official.
Buying vehicles through the canteen is a major benefit for defence personnel, because of the cheaper prices. A vehicle purchased through the CSD comes with a negotiated price which is lower than the market price. This also comes with an ongoing discount from the market such as a Diwali bonus. But the biggest benefit is 50 percent GST rebate.
Meanwhile, in another important issue Rawat explained that the government was not against providing ration to officers posted in peace stations, but was concerned about the process of distribution. “There were logistical issues in distributing the ration, especially when an officer who stays far away has to visit a particular place to pick it up. There were also challenges in distributing the ration to the officers’ residences,” said an official.
Another issue was that officers posted in peace who would have to go to remote areas for military exercises could not find places to buy their rations. The facility of providing rations to such officers was withdrawn in 2017. However, it continued for officers posted in field areas and JCOs and jawans.