Senior officials of Punjab’s food and civil supplies department have approached the Centre for releasing the cash credit limit (CCL) to procure wheat, which gets underway on April 1.
A team of state officials on Monday gave a presentation before the Union finance ministry officials on the state’s demand for CCL and the good practices it adopted in spending it, but there has been no immediate commitment from the Centre, sources said. Officials also took up the state’s past claims.
It is the fourth season in a row when the state government has to make up a strong case before the Centre for release of funds for procurement it carries out on behalf of the Centre. The state expects 110 lakh tonnes of wheat to arrive at procurement centres of the state from a total expected production of 170 lakh tonnes.
To be on the safe side, the state’s procurement agencies are making arrangements for procurement of 120 lakh tonnes, hence seeking CCL of Rs 20,000 crore to give a minimum support price of Rs 1,525 per quintal to farmers, plus the taxes levied by the state government.
Top officials of the state food and civil supplies department, including secretary Raj Kamal Chaudhary, are in Delhi meeting officials of the agriculture and finance ministries putting up a case for release of the CCL. Chaudhary gave a presentation before the officials of the Union finance ministry, but there was reportedly no breakthrough. The Centre’s decision may take a few days to come. Sources say Punjab food and civil supplies minister Adesh Partap Singh Kairon will also meet Union finance ministry officials on Tuesday.
The Punjab government is claiming receivables of Rs 26,000 crore from the Centre of the previous procurement seasons. Sources said the Centre had asked Punjab to explain the usage of Rs 50,000 crore it received during different seasons in the form of CCL.
A three-member committee formed by the Centre to settle claims with Punjab, in its recent report, has recommended that claims be settled from the current season and not from retrospective effect. But sources said the state government is pressing the Centre to settle the pending claims from back date.
“The Centre has agreed on a number of issues raised by Punjab, such as compound interest levied by banks on the CCL in usage by the state whereas the Centre is reimbursing simple interest for the said period and amount, and we want the settlement to be done from retrospective effect,” an officer said, on condition of anonymity.
When CCL was withheld
It was in the 2014 kharif season when the Centre withheld the release of CCL asking Punjab to first settle the accounts for Rs 42,000 crore of the previous CCLs with the Food Corporation of India.
Before that, the Centre has been finding faults with Punjab’s use of CCL over the past three to four years, and in rabi season of 2014, the Centre had told Punjab to settle the outstanding accounts. The Centre wanted Punjab to maintain “fiscal discipline”, whereas the state said it had to spend from its own pocket to procure paddy on behalf of the Centre. After kharif 2014, Punjab had to try hard for the release of CCL before the onset of every rabi and kharif season.