Cash-strapped Punjab Mandi Board looks to raise ₹2k cr for repairing rural roads
Mandi Board is responsible for the upkeep of rural roads totalling 65,000km in length and 1,872 mandis.
The cash-strapped state’s agricultural marketing board (Mandi Board) is looking to raise loans of ₹1,800 to ₹2,000 crore to repair the rural roads in Punjab, which have not been paved for the past 6 to 8 years.
Mandi Board is responsible for the upkeep of rural roads totalling 65,000km in length and 1,872 mandis.
As per surveys by the board, 17,500km of roads are in urgent need of repairs, at a total expenditure of ₹2,500 crore. The roads were last repaired between 2016 and 2018 and are now in shambles.
“If we don’t repair the roads now, then these would be damaged beyond repairs and the expenditure in that case would increase manifold,” said a top board official, pleading anonymity.
“We have some funds with us and need ₹1,800 crore to ₹2,000 crore additionally,” said Neelima, secretary Mandi Board. She added that there is an offer from the National Bank of Agriculture and Rural Development (NABARD) for the loans and the board is looking for other options as well.
The Mandi Board reportedly has written to financial institutions, banks and consortiums of the banks to come up with a proposal for which the last date is August 30 and after that, the board will go for the best option.
Once a cash-rich organisation, the board is facing an acute funds crunch after the Union government stopped rural development funds (RDF) that the state charges from the Centre on procurement of foodgrains (wheat and paddy) from the state.
Development in the rural sector, especially rural roads and mandis, is looked after by the Mandi Board from the funds raised via RDF and mandi fee.
No RDF received since six crop cycles
The state government has not received RDF on procurement of the previous three kharif (paddy) crops and same number of rabi (wheat) produce.
“As many as ₹500 crore of 2021 rabi season that are pending with the Centre. Plus, the release of ₹1,000 crore of 2021 kharif season, ₹650 crore of 2022 rabi, ₹1,000 crore of 2022 kharif, ₹800 crore of 2023 rabi, ₹1,000 crore of 2023 kharif and ₹900 crore of 2024 rabi are pending. The total comes to ₹5,850 crore,” the official added.
“The Centre had asked Punjab to amend the Rural Development Act, specifying its usage despite that the funds have been stopped. We were left with no option but to move Supreme Court, for resuming funds,” the mandi board official added.
The Centre stopped the release of funds in 2021 asking the state to amend seeking specific provisions regarding the use of accruals, and adding to its woes, the state government is also repaying loans raised during the previous Congress government led by CM Capt Amarinder Singh, which pledged future receipts of RDF to raise funds for its flagship farm debt waiver scheme.
A total of ₹3,976 crore was raised when the scheme was launched in 2018. The scheme provided 5.5 lakh farmers a relief of around ₹6,640 crore.
The Aam Aadmi Party (AAP) government has paid a sum of ₹1,130 crore, two instalments each of ₹565 crore, to the financial institutions and banks, which the previous government had raised to fund their debt waiver programme and a sum of ₹400 crore more is to be paid.
Before 2021, the Centre paid 1% instead of 3% RDF for one season amounting to around ₹500 crore. The Centre also pays a 2.5% mandi fee and a similar amount as arhtiyas commission.