Dec. 19 (Bloomberg) -- The three untended child-sized graves, a few minutes’ walk from the village of Paltupur, bear witness to what happened when the trucks loaded with nutritional powder stopped coming to this desolate corner of eastern India.
Great Value Foods Ltd.’s deliveries of the tasteless yellow substance, funded by a $2 billion program for India’s youngest and poorest, were cut off in August. All 2-year-old Jialal’s mother had left to give her son was boiled rice, the only food she could afford on a yearly income of about $75.
As the days stretched into weeks, the boy kept losing weight. His crying grew feeble. He ran fevers. He’d fall as soon as his mother, Kalavati, let go of his hand.
On Sept. 23, Jialal died, strapped to his mother’s chest as she searched the countryside for help. He wasn’t the first victim in the village, nor the last. On Aug. 20, Archna died. She was two. On Oct. 2, Anjali died. She was two.
In a neighboring village, graves also were dug for Karishma, who died on Sept. 10 at the age of one. And for Raj Kamal, who was two when he died on Oct. 4.
India’s only government program to nourish as many as 160 million children under six has failed those from Kaushambhi district in the state of Uttar Pradesh, and tens of millions of others around the country. The billions India budgets for feeding children -- 4.4 cents for each per day -- have barely dented one of the world’s highest rates of child malnutrition.
Instead, the program has allowed a web of private firms to take over distribution, in defiance of orders from the Supreme Court of India. For almost a decade the firms have delivered -- or not delivered -- a supply of unpalatable powdered rations of dubious nutritional value, according to interviews, court documents and a confidential report showing one state government has known about the theft and corruption for more than a year.
In Uttar Pradesh, those rations are produced in an old flour mill about 45 kilometers (28 miles) from the border with Nepal. There, paint peels off the walls, sacks of food are stored in the open and a mustachioed security guard waves a loaded shotgun at a reporter to deny him entry. More than 1,000 kilometers to the west in Bhilkera, in Maharashtra state, villager Ganesh Bilikamkale feeds powder meant for the children to his cows because it is so bad humans won’t eat it.
“It is an appalling situation that says so much about the problems in our country,” said Gurcharan Das, the former chief executive of the Indian unit of Procter & Gamble Co. and the author of “India Grows at Night” (2012), a book about government shortcomings. “There is a moral failure here, but the failure of governance has allowed it to happen.”
The dysfunction in India’s child food program, called Integrated Child Development Services (ICDS), is just one example of how malnutrition ravages the country. More than three-quarters of the 1.2 billion population eats less than the minimum targets set by the government. The ratio has risen from about two-thirds in 1983.
Corrupt politicians and their criminal syndicates have looted as much as $14.5 billion in food intended for public distribution to families in Uttar Pradesh alone. Food Minister K.V. Thomas cut short an interview and asked a Bloomberg reporter to leave when asked about corruption in the nutrition-distribution system.
When it comes to the children’s program, the national government and six state governments have failed to act even after repeated warnings that the relief food was failing to arrive or was substandard. A government-commissioned study said in 2011 that about 60 percent of the food meant for children was being siphoned off along the supply chain.
Prime Minister Manmohan Singh was told of defects in the program in a 2007 letter from a Supreme Court investigator and in a 2009 meeting with commissioners to the court, according to two people present who asked not to be identified because they weren’t authorized to speak publicly. The Supreme Court has ordered the government of India to fix issues with the food program three times since 2004.
In response to questions, the prime minister’s office provided details on how the government is working to improve the program. An October 2012 plan calls for restructuring the ICDS over three years, increasing focus on children under three. Higher daily allowances for each child will boost expenditures for the nutrition part of the program to $7.8 billion from the central government over the next five years. State governments usually match that.
The restructuring document didn’t clarify whether private firms should be banned from the process, suggesting that various models, including self-help groups or centralized kitchens, be considered, in addition to “bona fide manufacturers.”
The program has been “well-conceived,” the plan said. “The real problem lies in its implementation, which arises out of inadequate funding, lack of convergence, accountability of those managing and implementing the programme.”
“If these inadequacies are addressed appropriately, the scheme has the potential to give satisfactory nutritional and child-development outcomes.”
One of the few government bodies to have had any success improving the system is a special agency created by the Supreme Court. For 10 years it has struggled to ban private firms from the feeding program.
The court push is part of a tradition of activism at India’s highest judicial body. Last year it ordered companies to stop mining in areas of mineral-rich Karnataka state to protect the environment, and earlier this year it scrapped phone licenses that were allegedly rigged to favor certain companies. By encouraging public-interest litigation, similar to class-action lawsuits in the U.S., the court has helped empower marginalized Indians to claim their rights, including to government information.
While the court’s commissioners on the Right to Food Campaign helped provide evidence that led to the bust of criminal syndicates in the state of Karnataka, the three orders from the court over five years against hiring private contractors have been ignored in Indian states including Uttar Pradesh, Maharashtra, Gujarat, Haryana, Rajasthan and Meghalaya.
“It speaks volumes about the nature of administration in India that court orders are blatantly violated,” said Raj Kumar, a law professor and vice chancellor of O.P. Jindal Global University in Haryana. Until India delivers on the promise of economic justice made in the constitution, “our democracy will have little meaning for the vast number of people who are living on the margins.”
India has the highest percentage of malnourished children in the world except for East Timor, according to the 2012 annual Global Hunger Index. The report said 43.5 percent of Indian children are underweight. It is compiled by a group of non-governmental organizations including the Washington-based International Food Policy Research Institute.
About $540 million of food meant for children was stolen or registered as delivered via faked paperwork in 2009, according to a 2011 internal review of the program by the New Delhi-based National Council of Applied Economic Research (NCAER). In Uttar Pradesh state, so much was siphoned off that each severely malnourished child received food worth less than a penny a day.
In both Uttar Pradesh and Maharashtra, India’s most populous states, most of the money has gone to private firms.
Great Value Foods has held the largest ICDS contract in Uttar Pradesh for the past seven years, according to a program document obtained under India’s Right to Information Act. The biggest stake in Great Value Foods was owned by a company belonging to a liquor baron named Gurdeep Singh Chadha -- until he was shot and killed by his brother last month.
In Maharashtra, private companies have exploited a loophole, intended to increase the participation of women’s groups, to take over feeding contracts for the entire state.
The food in both states failed to meet all but one of the government’s prescribed nutritional standards, samples of the powder tested by the Supreme Court commissioner’s office found, according to court records. In Uttar Pradesh, one of the two samples had no vitamins, the other had no iron. In Maharashtra, none of the packets contained any vitamin A or C. All the packets tested were between 15 percent and 35 percent short of the required calorie content.
The Maharashtra government was made aware of the program’s shortcomings in late 2011, when an investigation carried out by the Maharashtra State Commission for Protection of Child Rights found an “unholy nexus” between business and government. There were wide discrepancies in how much food the providers said they were distributing and how much the children were receiving, according to a copy of the confidential report made available to Bloomberg News.
The food being produced was inedible -- and even cows appeared to refuse to eat it, the report said. The Supreme Court’s orders on banning contractors from the tender process were being violated, and a full investigation should be carried out by the state government, the report concluded.
Maharashtra Chief Secretary J. K. Banthia wasn’t available to comment because of a busy schedule, a person who answered the phone in his Nagpur offices said. His public-relations officer, Ajay Jadhav, said by phone he couldn’t comment.
Nationally, the ICDS program is under the auspices of the Ministry of Women and Child Development in New Delhi. In a Dec. 13 interview, Minister Krishna Tirath said private contractors weren’t involved in the program.
In almost every state, the program is working “very nicely, properly,” Tirath said in her office, estimating that at least 90 percent to 95 percent of the food is delivered. “There are no contractors now, contractors are not there.”
When questioned about the failure of food to arrive in Kaushambi, she blamed it on “one or two” ICDS workers. This isn’t a “true” picture, she said. As for Gurdeep Singh Chadha, the late liquor magnate whose company was involved in the Uttar Pradesh contract, she said she hadn’t known that.
Tirath’s deputy, joint secretary Shree Ranjan, said that viewing the ICDS only as a feeding program distorts its achievements, which include high rates of immunization for children, education of mothers in how to take care of their children and encouragement for school enrollment.
Ranjan also said the ministry rejects the NCAER’s findings that 60 percent of the food for children is siphoned off. The report’s sample size was too small and its methods were flawed, he said.
When first implemented in 1975, the ICDS was intended to give poor children a daily nutritious meal on the premises of their schools. They would be overseen by a trained supervisor who watched their weight, provided their mothers with nutrition advice and watched for especially needy cases, program documents from the period said.
Until the early 1990s, the program worked as planned, although it hadn’t spread to include all of India’s children, according to a World Bank review done in 2001. By the mid-1990s, though, private contractors were beginning to get state contracts to provide food. They provided nutritional powder or biscuits, not meals.
The first of a series of lawsuits challenging the Indian government’s delivery of food to its people came in 2001, when an advocacy group, the People’s Union for Civil Liberties, sued. In 2004, 2006 and 2009, the Supreme Court responded by banning private contractors from participating in the ICDS food program.
Uttar Pradesh has entrusted Great Value Foods to provide nutrition for the state’s children since 2005. The company holds two contracts with the state government under the ICDS program, according to a January 2011 ratings report by India’s credit rating agency, ICRA Ltd. The company was to provide 7,200 tons monthly of enriched food for adolescent girls and pregnant mothers and 6,400 metric tons monthly of weaning food, which is given to children under the age of three.
Based in New Delhi, Great Value Foods was described in a 2009 credit-agency document as being almost 60 percent owned by a group of companies called Chadha Group, now named Wave Group.
Chadha, known as Ponty Chadha, was killed in a 15-minute gun battle at one of his luxury farmhouse residences near New Delhi by his brother over a property dispute on Nov. 17. The brother was then shot dead by Chadha’s security guards, the New Delhi police said in a statement.
Chadha traveled with armed guards and courted political leaders across party lines. In 2009, he received a state monopoly on liquor deals, Uttar Pradesh Excise Commissioner Mahesh Kumar Gupta said in a Dec. 14 phone interview. Chadha also bought sugar mills from the Uttar Pradesh government at half of market prices, according to a 2012 audit by the Comptroller and Auditor General of India.
“It is obvious that the contract was not given for benevolent reasons, why would you give it to a businessman with such a questionable reputation?” said Jagdeep Chhokar, a former professor at the Indian Institute of Management in Ahmedabad and the Association for Democratic Reforms, which has campaigned for better governance since 1999. “This is the way that politics is done in U.P. and all over India.”
Chadha’s other brother, Rajinder Singh Chadha, succeeded him as head of Wave Group, formerly Chadha Group, which owns the Great Value Foods stake.
Great Value Foods has a factory about 11 hours’ drive from Kaushambhi, the district where the toddlers died. In early December, the factory, which sports the Great Value Foods name in foot-high blue letters on a wall and the entrance, could be seen to have a storage unit and a production facility inside a walled compound about 300 meters by 100 meters.
No management officials were available to meet with visitors, said a man with a holstered revolver who gave his name as Ramesh Bali. He had been summoned by the security guard with the shotgun. Behind the barred gate, about 800 50-kilogram (110-pound) sacks of grain were stored in the open.
In February 2011, an investigator for the National Human Rights Commission was granted entry to the factory during a surprise inspection. The investigator, whose name wasn’t released in his final investigative report, didn’t mince words as he noted that at the factory that day there weren’t enough grains to meet daily production targets.
“There is an apology of a laboratory which only checks moisture content,” he wrote. “It has none of the cleanliness and attention to hygiene that one would expect in such a factory. The factory is supposed to be regularly inspected, but the supplier has too much clout for officers to want to meddle with him. On the whole, a most unusual place in which to produce what six-month-olds will be consuming.”
The human rights commission investigation found through a chemical analysis that the powdered food being given to the children didn’t contain the ingredients required by the government in its initial contract.
Children between six months and three years were supposed to get 125 grams daily of a micronutrient-fortified weaning food that had at least 500 calories and 16 grams of protein. The proportions to achieve that, listed in the document released by the Uttar Pradesh government: 34 percent wheat, 18 percent soya powder, 5 percent corn flour, 12 percent rice, 25 percent sugar, 5 percent oil and 1 percent of additional vitamins and minerals.
Bloomberg News e-mailed Barbora Delinic, spokeswoman for the Wave Group. A person representing Perfect Relations, a New Delhi-based public relations company, who asked not to be named because she wasn’t a spokeswoman for the company, said Dec. 14 that she would speak with Wave Group officials to provide comment. On Dec. 17, the person said Wave Group doesn’t own Great Value foods, and thus couldn’t provide comment.
An undated company description on a Wave Group website says it has a “partnership” with Great Value Foods and the credit agency put Great Value Foods on rating watch because of “the demise of the promoter of the group Mr Gurdeep Singh Chadha.”
While Great Value Foods doesn’t have a listed phone number or website, a freedom of information act request showed it is headquartered in an upscale residential area of south Delhi. The building is a four-story apartment building with balconies on each level at the front and back. In the basement, filing cabinets sat behind a meshed fence as 10 to 15 people worked.
A man who said his name was Bidesh Gupta confirmed the building was an office of Great Value Foods and asked a Bloomberg News reporter who visited his office on Dec. 17 to return the next day. When two reporters did so he wasn’t there.
Shree Sadakanth, the director of the Uttar Pradesh Women and Child Development Ministry, which runs the program at the state level, declined a request for an interview. His deputy, Brij Mohan, initially agreed to an interview with Bloomberg News, but didn’t allow reporters into his office after they had provided a list of questions at his request.
The chief coordinator for the Uttar Pradesh ICDS, Shambhu Nath, said he was too busy to meet with reporters, and didn’t answer a set of questions that were faxed to him. Sadakanth and Nath didn’t return phone calls on Dec. 14.
The district of Kaushambhi, where Great Value Foods holds the ICDS contract, is two hours’ drive down a bumpy road from the holy city of Allahabad. The villages here are clusters of small, mud huts. Open sewers run alongside the road, and the smell of feces is thick. Villagers defecate in the fields, and their animals -- cows, pigs and goats -- defecate everywhere.
In Jialal’s village, none of the dozen mothers interviewed had heard of Great Value Foods. Jialal’s mother, Kalavati, can’t read, and has never traveled more than two hours’ drive from the nearby village that she was born in.
In late July, Jialal had weighed about 6.8 kilograms, about half the weight of a healthy baby of that age, according to a field survey carried out by a local nonprofit group that was looking for signs of malnourishment in Kaushambhi. Jialal, and the four other children who died in the months after the powder deliveries stopped, all weighed too little for their age, according to data the group collected.
While supplies had been erratic all year, deliveries stopped entirely in August, ICDS central block development project officer Saritha Rai said at her office Dec. 7. Her superior, district project officer Santosh Srivastava, confirmed the three-month stoppage in a phone interview on Dec. 17.
Kalavati wasn’t counting. What she did know back in September was that her child was sick. Her husband was away in a nearby village looking for work the night Jialal was running a fever whose origin she couldn’t determine.
On the evening of Sept. 23, she picked up her child and went to seek help. She walked two kilometers through the wheat fields, then across a small bridge over a river. Jialal, his breath shallow and his brow hot, was wrapped in a cloth against her chest. By the time Kalavati reached the small clinic, the skies were growing dark. She had walked just over five kilometers.
The rudimentary clinic has a temple to Hanuman, a Hindu monkey god, in the front yard and six cots in the back. In the small examining room during a reporter’s visit Dec. 7, a bare bulb shone on cigarette butts and red stains from betel nut that people have spat out. Empty bags of saline drip dangled from metal hooks above the bed, the only visible medical equipment in the entire clinic other than a rusted blood pressure monitor.
The clinic is run by Suresh Kumar, whom the villagers call doctor. He isn’t. He has a degree in biomedical engineering from the University of Lucknow, a sign in English says on the back of a door. When asked about his degree, Kumar said the sign was mistaken, and that his degree was from a local institute that lost its accreditation.
The clinic is the only medical facility near the village -- a government-run hospital is 17 kilometers away.
“The child was very weak, almost dead,” he said of Jialal, sitting straight in his chair and fiddling with the blood pressure monitor. “This is a very small clinic. We don’t do much here other than diagnose coughs and colds. So I told her to take him to the hospital in Allahabad.”
Kalavati remembers Kumar examining Jialal.
“He said to me that I should bring all my money, as much as I can, two or three thousand rupees ($35-$55) and take him to the city,” said Kalavati, weeping in the small courtyard of her mud hut. Two pigs -- the family’s sole source of income -- ate chaff near the entrance. Last year, she and her husband earned no more than $75 raising pigs, she said. Her life savings of about $73 had been spent the previous January when her three-year-old daughter fell sick.
And so, she picked up her son, wrapped the cloth that held him to her and started the walk back to her village.
“Suddenly,” she said, “he felt lighter.”
Jialal was dead.
Before the sun came up on Sept. 24, the boy’s body was wrapped in cloth and lowered into a grave under a tree in the field near Kalavati’s home, according to Rehaan, a worker at the nonprofit group who attended the prayer ceremonies. Hindus bury, rather than cremate, small children. Their souls are believed to be sinless, and don’t need the purifying funeral pyre to start the cycle of reincarnation.
“The job of the ICDS is to keep these children healthy and it failed completely,” said Parvez Rizvi, secretary of the nonprofit, Doaba Vikas Evam Utthan Samiti Ltd., which carried out the survey of the children’s weights and mortality. “If the program was working, if the food was reaching the children, would these babies have died? No.”
Not only has the child-food program failed to deliver food for Jialal and tens of millions like him, across large swathes of India the program doesn’t function at all. Only 79 million of the nation’s 160 million children are officially enrolled, according to figures from the Ministry of Women and Child Development.
The poor northern states, including Uttar Pradesh, that account for nearly half of India’s population and suffer from the highest rates of child malnutrition have the lowest levels of funding, according to data compiled by Bloomberg from government reports.
One in every three malnourished children lives in India and about 50 percent of all childhood deaths are attributed to malnutrition, according to Unicef. In 2011, 1.7 million children under the age of five died in India, about 5,000 a day.
Of those 5,000, at least half die of malnutrition-related causes often associated with infectious diseases, according to Child in Need India, a London-based charity. Another 11 percent die from diarrhea, which further weakens children as their body is unable to absorb nutrition.
In only a few places in India does the feeding program provide hot meals. In the Maharashtra district of Melghat, children eat steaming rice and dal in a feeding center in the village of Semahado. Before a 2011 state court order, they were fed daily fistfuls of nutritional powder.
For many of the 40 children, this is the only time they will get any vegetables. It’s one of their two meals a day.
Aethi Sanjil Dhinkal, 22, who has three daughters and earns money collecting firewood, says the program helps her stretch the family’s $18.40 budget through the month.
The children have no toys and they live in a one-bedroom hut without any beds and a leaky roof. On the wall hangs a picture of Lakshmi, the Hindu god of wealth.
“If the program closed, our children may have to go without food,” said Dhinkal.
Vandana Prasad, a doctor who is a member of the National Commission for the Protection of Child Rights, said it is one of the better programs in India.
“The court case has made a big difference,” said Prasad, who visited the program in Melghat last month. “With proper supervision it shows you how the program can be run.”
That feeding program is now being tested in the Supreme Court, where private contractors are challenging the Melghat state-court decision. The lawsuit may help decide whether India will continue to use private firms to feed children the pre-cooked mixtures, or whether government distribution channels will provide them with hot meals cooked in local centers.
A Bloomberg News review of thousands of documents shows how politically connected families in Maharashtra repeatedly violated the Supreme Court’s 2004 order that private contractors be excluded from ICDS contracts.
The loophole comes through a state government decision to encourage women-run organizations. A change to the definition of women-run in 2009 for purposes of the children’s program allowed any private firm that has female leadership to bid. That year 100 percent of the state contracts to feed children take-home rations were won by three such organizations.
After the contracts were awarded, the boards of each of those organizations became dominated by the wives and other female relatives of politically connected Maharashtra men, according to documents filed in the case.
Six of the 13 women directors of one of the companies, Venkateshwara Mahila Audyogik Utpadak Sahakari Sanstha Ltd., were members of two families, according to voter records filed with the case.
Satish Munde, the husband of one of the directors, is the cousin of Gopinath Munde, a political leader at the state level with the Bharatiya Janata Party, according to a news report by Indian website rediff.com. Gopinath Munde was a member of the Maharashtra state legislature from 1990 to 2009.
Munde, in a short phone conversation, denied Satish was his cousin and said he was a friend.
Venkateshwara subcontracted the work out to two companies, one of which lists Munde as its managing director, and another that is owned by the husband of another committee member, according to documents in the case. Under the Supreme Court’s orders, these companies wouldn’t have been allowed to win the contract, according to arguments by the Supreme Court’s commissioner’s office.
The two other women-led firms that won Maharashtra state contracts entered into similar subcontracting agreements, according to court documents.
The discrepancies in how the three firms carried out the contracts caught the attention of the Maharashtra Co-Operative Department, which investigated one of the companies. In the 13-page confidential report filed with the Supreme Court, it listed violations including transgressions of financial record-keeping, not keeping inventories of food and hoarding profits.
“Despite seven years having passed since the Supreme Court banning contractors from the ICDS program, this politician-bureaucrat-contractor nexus has managed to violate the orders of this court with impunity,” Biraj Patnaik, a principal adviser to the Supreme Court’s right-to-food campaign, wrote to the court. “That this system continues shows the level of influence that private contractors have on the levers of power in the state.”
Venkateshwara holds the contract to supply food to the villages of Bhilkera, two hours’ drive from Melghat. Unlike the children of Melghat, Bhilkera’s toddlers get powdered rations.
The powder is so bad, villagers say, that it isn’t given to the children because they get stomach cramps and diarrhea. The results are visible: swollen bellies and ribs that can be counted.
By the village entrance, next to a shrine to Lord Shiva, the Hindu deity of destruction, Ganesh Bilikamkale is feeding the powder to his cattle. As the brown cows lick the powder, stick-thin children play nearby.
Bilikamkale, who says he receives about 20 kilograms of the food a month for free from the ICDS center, says it is better not to waste it.
“The cows love it but then they will eat anything,” said Bilikamkale. “No human should be made to eat this stuff, particularly not children.”
Back in the cluster of villages where Jialal lived, 1,200 kilometers away, the rations Great Value Foods has restarted delivering for 10,092 children sit behind a padlocked door. The trucks brought 524 50-kilogram sacks of weaning food, meant to last a month. But there were no morning snacks or enriched food.
Total supply should have been almost 2 1/2 times larger, said Saritha Rai, the child-development project officer of that block of villages.
In her village, Jialal’s mother holds out the small bowl of uncooked rice that she will boil over firewood to feed her two remaining children and crippled husband. She had also borrowed money from a neighbor to buy a few potatoes and an onion.
A few houses down, not far from the unmarked patch of earth where the toddlers are buried, 13-month-old Mohit cries against his mother’s chest. He weighs just over five kilograms, about half what a child his age should. His head is too heavy for his neck; his legs are too thin for him to crawl.
“He needs help now, some food, anything,” said his mother, Shanti Devi, wrapping Mohit up in a borrowed sweater and a woolen hat against a cold breeze. “And soon.”