State-owned agencies -- MMTC, STC, NAFED and PEC -- suffered losses of Rs 1,201 crore on import and sale of pulses between 2006 and 2011 without succeeding in price stabilisation in the market, government auditor CAG has said.

In its report presented in parliament on Tuesday, the Comptroller and Auditor General of India (CAG) said, "As against the targeted quantity of import and sale of 53.10 lakh tonnes of pulses during 2006-11, the agencies imported 30.04 lakh tonnes and sold 26.95 lakh tonnes of pulses during this period, incurring losses totalling Rs 1,201.32 crore on these transactions".

It said in the absence of any specific guidelines, all the designated importing agencies sold the imported pulses in the open market through the tendering process, instead of distributing through state agencies.

But, tender conditions, especially those of high minimum bid quantitites (200-1000 tonnes) and corresponding earnest money deposits, ensured that mainly large private players could subit bids, "thus restricting the channels of distribution and keeping most of the smaller parties out of the loop," the CAG said.

Out of the test-checked sale of 8.38 lakh tonnes of pulses, it was found that 6.08 lakh tonnes (73 per cent) was sold to just four large buyers, the government auditor said.

The report found that the Union Cabinet decided to allow the state-owned agencies to import yellow peas in March 2009 despite the Ministry of Consumer Affairs stating in November, 2008 that there was no need for such imports.