Punjab: Cash credit limit for wheat procurement awaits SBI’s report | punjab$regional-takes | Hindustan Times
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Punjab: Cash credit limit for wheat procurement awaits SBI’s report

punjab Updated: Apr 06, 2016 11:59 IST
Gurpreet Singh Nibber
Cash credit limit

“We are waiting for the lead bank to send the report so that we get funds for procurement as soon as possible,” said an officer in the food and civil supplies department.(HT Photo)

The Punjab food and civil supplies department is struggling to get the cash credit limit (CCL) released from the Centre for procurement of wheat that got underway in the state on April 1.

The Reserve Bank of India (RBI), which releases the CCL to the state through its lead bank, State Bank of India (SBI), last week reportedly asked the SBI to submit a report on the best practices adopted by the state during the previous procurement seasons. The SBI, which is the lead bank for providing funds to the state for procurement, so far has not sent the report to the RBI.

“We are waiting for the lead bank to send the report so that we get funds for procurement as soon as possible,” said an officer in the food and civil supplies department. After receiving the report, the RBI may take a few days to process the state’s case.

Meanwhile, though the wheat arrival in the mandis is currently negligible, it is expected to pick up by next week. However, uncertainty over the release of CCL continues and senior department officials say it may take a few days because of “procedural delays”.

Punjab intends to procure 120 lakh tonnes for the Centre’s public distribution system out of an expected wheat production of 170 lakh tonnes this season. To give a minimum support price of Rs 1,525 per quintal to farmers the state needs Rs 20,000 crore.

Last week, food and civil supplies minister Adaish Partap Singh Kairon and secretary Raj Kamal Chaudhary were in Delhi to make a case before the Union finance ministry for the release of CCL.

Same old story

It is the fourth consecutive season when the state government had to make up a strong case before the Centre for release of funds for procurement.

In the 2014 kharif season, the Centre had 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 had been finding faults with Punjab’s use of CCL over the past three to four years, and in rabi season of 2014 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.

Arrangements for gunny bags on

Meanwhile, the state department is still in the process of making arrangements for gunny bags and finalising allotment of work to transporters for shifting the procured wheat from mandis to godowns.

The state requires 3.8 lakh bales of gunny bags (each bale has 500 bags to fill 50-kg wheat each) of which 2.47 lakh are jute bags and the rest are poly propylene. “We have finalised arrangements for 50% of the transportation required for shifting the wheat,” an officer said.