The cash-strapped Punjab government deposited Rs 926 crore in the cash credit limit (CCL) account last month to come clean on the funds the Centre released to it to buy foodgrains.
The SAD-BJP government, which struggles to pay its employees, was forced to dip into departmental funds to generate Rs 1,000 crore for the CCL, which is money advanced to the state by the Centre to buy foodgrain.
This came as a surprise since the Parkash Singh Badal government had been claiming that it’s the Centre that has to reimburse it Rs 26,000 crore to buy foodgrains.
Returning the amount is part of an exercise to settle the 20-year-long CCL dispute with the Centre. “The government had to release some amount to the banks to resolve the CCL issue,” state finance minister Parminder Singh Dhindsa said.
A committee, comprising Punjab and central government officers, that Prime Minister Narendra Modi set up to break the logjam, met in Delhi on Saturday.
The Centre and the Reserve Bank of India (RBI) sanction the CCL as working capital, funded by a consortium of banks, to buy foodgrain. The value of foodgrains in godowns of state agencies should match the amount the Centre releases.
Punjab says there is a huge gap between the cost incurred in buying foodgrains and reimbursement by central agencies.
“We are pressing the Centre to reimburse our money,” Punjab food minister Adaish Partap Singh Kairon said after the RBI asked banks in April to classify the Rs 12,000 crore given to the state for buying foodgrains as bad loans.
In the process of generating the Rs 1,000 crore, the Punjab government realised that its departments, boards, corporations and public sector undertakings (PSUs) are cash surplus. After seeking information about each department’s financial status from banks, it was found that they have Rs 4,455 crore stashed away. Sources say 42 government-run organisations have Rs 3,457 crore in fixed deposit (FD) or bonds, while Rs 106 crore is in current account and Rs 892 crore in saving accounts.
“This is financial imprudence and will be set right. How can departments park money outside the treasury? This will be stopped,” a government functionary said.
The state government was unaware about this money and is exploring options to see if this money can be used in an emergency.
“A committee, led by chief secretary Sarvesh Kaushal, is examining how the government can use this money. The departments should have deposited this money in the treasury. (On the positive side) We know how much each department has now,” Dhindsa said.
The government began the scrape-the-barrel exercise when it had to deposit money in the CCL account, the foodgrain loan kitty.
“The picture is not clear. We are awaiting information from departments about their financial status. But it is a fall back option,” Punjab additional chief secretary for finance DP Reddy said.
The state departments were told to reveal their financial status to ascertain if their funds were in order, he said, adding that the government could use the money “if there is a necessity”.