RBI finds stock value short by Rs 27,000 cr, Punjab govt denies
The bogey of “missing food grain” in Punjab has been dismissed by the Parkash Singh Badal government as “conspiracy of anti-Punjab elements” and “a bundle of lies”. But someone seems to be lying — either the Badal government or the Reserve Bank of India (RBI).punjab Updated: May 19, 2016 12:01 IST
The bogey of “missing food grain” in Punjab has been dismissed by the Parkash Singh Badal government as “conspiracy of anti-Punjab elements” and “a bundle of lies”. But someone seems to be lying — either the Badal government or the Reserve Bank of India (RBI).
“We have now received the stock statements for April-to-July 2015, which show a gap of almost Rs 27,000 crore between the value of stocks that you (Punjab) held vis-a-vis the outstandings in the CC (cash credit) accounts,” the RBI told the Punjab government in an October 1, 2015, letter that HT has accessed.
For food-grain procurement, the Centre and the RBI sanctions the cash credit limit (CCL) in the nature of working capital funded by a consortium of banks. The grain procured is stocked by the state agencies; and the value of the physical stock in storage should match the money that the Centre pumps in. However, the RBI’s letter brings to the fore a yawning gap between the existing stock and the money spent on procurement.
Denying any wrongdoing, the Badal administration has been in a damage-control mode since the RBI last month asked banks to classify Rs 12,000 crore given to Punjab for food-grain procurement as “bad loan”. “Beware of those out to defame Punjab,” cautioned the Badal dispensation in a publicity blitzkrieg, and claimed: “There’s no mention by the Union government of any shortage in wheat stock procured by the Punjab agencies.”
In the run-up to the 2015 kharif marketing season, and state government and the RBI had exchanged many letters over the sanctioning of the CCL for paddy procurement on account of mismatch in the stock held. RBI general manager R Devi’s letter to the principal secretary of the Punjab food civil supplies department refers to a September 9, 2015, letter and a September 24, 2015, e-mail about Punjab’s seeking more than Rs 22,000 crore CCL for paddy. Devi’s letter also draw’s the state’s attention to previous correspondence.
Referring to an April 9, 2015, letter, the RBI told the government that the CCL sanctioned was for only the state government and not its procuring agencies. The Centre affirmed it on June 9, 2015, while giving its consent for the rabi marketing season. The RBI confronted Punjab, saying the “filing of stock statements is not regular”.
The state government claims that till November 2015, the Centre owed Punjab almost Rs 26,000 crore — Rs 8,000 crore in principal amount and Rs 18,000 crore in interest — regarding non-reimbursed paddy transportation charges, difference between simple interest paid by the Centre but charged by the RBI, and the difference between actual transportation expenditure and the rate finalised.