The Reserve Bank of India (RBI) on Wednesday revalidated and extended validity of authorisation of Rs 17,523 crore as cash credit limit (CCL) for wheat crop of the rabi 2016-17 season in Punjab till May 31.
Sharing details, food and civil supplies minister Adaish Partap Singh Kairon said the move will pave the way for release of balance dues of farmers, arthiyas (commission agents) and other stakeholders.
It may be recalled that Rs 5,938 crore have already been released to farmers and arthiyas and the remaining are being despatched. According to the minister, state agencies, FCI and private traders have procured 108.3-lakh tonnes of wheat till date, of which 84.3-lakh tonnes has already been lifted.
As per the Punjab Agriculture Produce Markets Act, the whole procurement has to be lifted within 72 hours of procurement. The state agencies and FCI have lifted 78% of wheat till date, he said.
The RBI had sanctioned the cash-credit limit (CCL) of Rs 17,523 crore to the Punjab government 20 days after the start of the procurement season. The state government had sought a CCL of Rs 20,093 crore.
The RBI had delayed the CCL as huge stocks of food grains were allegedly missing from Punjab godowns.
This also delayed payment to the farmers who are waiting at the grain markets for their produce to be lifted at the minimum support price (MSP) of Rs 1,525 per quintal.
What is cash credit limit
A cash credit is a drawing account against credit limit granted by the bank and is operated in almost the same manner as an overdraft account.