Paddy procurement: State has to settle accounts for Rs 42,000 cr with Centre

  • Gurpreet Singh Nibber, Hindustan Times, Chandigarh
  • Updated: Nov 11, 2014 19:03 IST

Punjab may have heaved a sigh of relief by getting funds from the Centre for paddy procurement this kharif season, but the state still has to explain how it used the cash credit limit (CCL) to the tune of Rs 42,000 crore in the past.

The second CCL instalment of Rs 10,451 crore for paddy procurement was released on Friday by the Centre after a number of frantic calls by the state and explanations by food and civil supplies minister Adesh Partap Singh Kairon.

The payment had been withheld after Punjab was asked to first settle the accounts for Rs 42,000 crore of previous CCLs with the Food Corporation of India (FCI).

The first CCL instalment of Rs 8,000 crore was exhausted 12 days ago. The state government has now released Rs 1,400 crore to 20,000 arhtiyas for crop payment to the farmers.

Centre’s objections

The Centre has been finding faults with Punjab’s CCL usage over the past three-four years. In the previous rabi season, the Centre had told Punjab to settle outstanding accounts, but the state ignored the direction.

The central government has made it clear that in the forthcoming rabi procurement season, the CCL for wheat procurement would not be released unless Punjab settles the recoveries. The former wants Punjab to maintain “fiscal discipline”, whereas the state says it has to spend from its own pocket to procure paddy on behalf of the Centre.

Of the CCL of Rs 18,000 crore demanded by the state for paddy procurement in the current kharif season, Punjab received Rs 8,000 crore on October 10, as many as 10 days after the start of the procurement season.

The Centre also want Punjab to justify the charges of 14.5% (2% rural development fund, 3% infrastructure development cess, 2% market fee, 5% VAT, and 2.5% commission agents’ fee) that it levies on the Centre over and above the minimum support price on the foodgrain (wheat and paddy) procurement, while other paddy-wheat-growing states levy much less charges.

The Centre has also objected to the ‘diversion’ of Rs 2,000-crore CCL funds during the past four years by the state to fund its atta-dal scheme.

All said and done, Punjab has a lot of explanation to do if it wants uninterrupted flow of CCL funds from the Centre.

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