Chandigarh, Dec 27 (IANS): The central government has allowed the Punjab government to dispose off over six lakh tonnes of damaged wheat lying in the state, an official said Saturday.

"The government and its procurement agencies have damaged wheat to the tune of six lakh tonnes lying in Punjab. According to the earlier guidelines of the central government, only those parties registered with the FCI (Food Corporation of India) were eligible for participation in the tendering process," a state government spokesman said here.

"There were about 30-40 parties in India registered with the FCI for purchase of damaged wheat. These parties connived with each other to pool the tenders and offered very less rates to the procurement agencies. The state government agencies suffered huge financial losses," he said.

He said the majority of these bidders had limited purchasing capacity and used to lift only some part of the damaged wheat, resulting in the government agencies bearing additional heavy costs on warehousing expenses of the damaged wheat.

Punjab contributes over 50 percent of the foodgrains to the national kitty despite having just 1.54 percent of the country's geographical area.