On Monday, when the Bombay High Court quashed tenders worth Rs 6,300 crore issued by Maharashtra’s Women and Child Development department, the headlines projected it as yet another setback for the department’s scam-accused minister Pankaja Munde.

While that may indeed be the case, the petitioners in the case, who mainly comprise mahila bachatgats or small women’s self-help groups, are not entirely happy with the verdict. The court order appears to provide them with relief, but they claim it doesn't actually address the crux of the matter – that of big contractors monopolising government tenders seemingly tailor-made for them, at the cost of smaller self-help groups.

Government U-turn

In February, the Maharashtra government had issued tenders for the manufacture and supply of nutritious take-home rations by mahila bachatgats. These rations would be supplied to lactating mothers and vulnerable children in the state’s 90,000 anganwadis or day-care centres under the central government’s Integrated Child Development Scheme, a supplementary nutrition programme that aims to tackle high malnutrition rates among the poor.

According to the mahila bachatgats who petitioned the court, Maharashtra had crafted these tenders to favour large contractors – three in particular – while putting local women’s groups at a disadvantage.

Since 2004, the Supreme Court has repeatedly emphasised that contracts for the production and distribution of Integrated Child Development Scheme foods should be given to local-level self-help groups and women’s community groups, while large contractors should be kept out of the programme. This decentralisation is meant to ensure that the focus of the government scheme remains quality food supply and generation of rural employment, rather than private profit-making.

In keeping with these guidelines, the Maharashtra government, in 2013, divided the state into 553 blocks from which it invited tenders for the supply of take-home rations.

In 2014, the government granted operational licenses to 314 bachatgats that installed roaster technology machines worth Rs 20 lakh each to make roast-dried, ready-to-cook packaged rations out of wheat, sugar, soya and specified quantities of micronutrients.

However, in December 2015, while self-help groups in the remaining blocks were still awaiting their licenses, Maharashtra made it mandatory for all take-home ration suppliers to move from roaster machines to expensive extrusion machines that cost nearly Rs 1 crore each.

The bachatgats had barely three months to grapple with this new demand when, on March 8, Munde’s ministry floated new tenders that virtually excluded women’s groups from supplying rations.

In an attempt to centralise the ration distribution system, the state had re-organised the 553 small blocks into 70 large blocks from which tenders were invited.

The new tenders had strict eligibility criteria – those bachatgats that had failed to upgrade to extrusion technology were ineligible as were those who could not guarantee an annual turnover worth 25% of the block’s purchases of take-home rations.

“The moment you mandate extrusion machines and other conditions, you ensure that only the rich can apply,” said Biraj Patnaik, the principal advisor to the Supreme Court commissioners on the Right to Food. “Why do we need all these machines? Since when did feeding our children become rocket science?”

Questionable monopoly

In response to the state’s March 8 tender notice, 36 self-help groups petitioned the Bombay High Court, claiming that the state had introduced tender conditions impossible for small players to fulfill in order to favour certain large-scale contractors.

The petitions claimed that three companies in particular had been allowed to monopolise the take-home rations business for years. These companies were Venkateshwara Mahila Audhyogic Utpadan Sahakari Sanstha Limited in Latur, Mahalaxmi Mahila Grhaudhyog and Balvikas Buddheshiya Audhyogic Sahakari Sanstha in Nanded and Maharashtra Mahila Sahakari Grahudhyog Sanstha Limited in Dhule.

These three contractors were women’s institutions only on paper – they were found to be owned and run by private agro-companies. In 2012, a Supreme Court-appointed committee also found them to be supplying poor quality rations and submitting false sales tax clearances.

Despite all this, the petitioners claimed that these three companies were allowed to submit as many as 60 tenders each from 70 blocks for the Integrated Child Development Scheme in March – a clear indication of their monopoly.

'Not satisfied with verdict'

In its July 11 verdict, though the court “set aside” the March 8 tender notice, which reduced the number of blocks from 553 to 70, and ordered the state to conduct a fresh survey of all blocks and eligible self-help groups who would be able to provide take-home rations, it did not interfere with the terms of the tender on the grounds that the judiciary did not have the power to scrutinise the specifics of such contracts.

“All other terms and conditions of the tender are held valid,” the order said.

The order also did not challenge the state’s inclusion of pre-qualification conditions for those applying for tenders.

While acknowledging that extrusion machines cost much more than roaster machines, the order did not interfere with the government’s clause making extrusion machines mandatory on the grounds that nearly 100 women’s groups had already invested in these machines.

This effectively means that even if the state goes back to its original 553 blocks, smaller bachagats will be at a disadvantage as many of them do not have the resources to invest in these mandatory machines.

“This was a fight against centralisation of the ration supply, and it is good that the state will now have to rethink the tenders and conduct a fresh survey to determine who qualifies to apply,” said Kirti Karwa, who heads the Siddhivinayak Bachatgat Mahasangh in Amravati district, and was one of the petitioners in the case. “But we’re not entirely happy with the court’s verdict.”

As long as extrusion technology remains mandatory rather than optional, local women’s self-help groups will not be able to compete against bigger contractors. “If the state is allowed to insist on the use of extrusion technology, it will be impossible for self-help groups to survive,” said Aditya Shrivastava, a lawyer working with the Right to Food Campaign in Delhi. “One way or another, the tenders will go into the hands of big contractors.”