Loan repayment, no RDF a double whammy for cash-strapped Punjab mandi board
The board, which oversees the expenditure of RDF, hasn’t received funds from Centre since 2021 and is also repaying loans raised by previous Congress govt
Once a cash-rich organisation, the state agricultural marketing board (mandi board) faces a severe financial crunch in the absence of the rural development fund (RDF).
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.
“Our 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. I think a sum of ₹400 crore more is to be paid,” finance minister Harpal Singh Cheema had said while talking to the mediapersons a week back. These instalments are paid annually and every year and the deadline is October 1.
Historically, raising funds by pledging future receipts of RDF is not a new thing. RDF has been kept out of the state’s budget and is used by successive governments from time to time to raise quick funds for populist schemes.
The Akali-BJP governments led by former CM Parkash Singh Badal used to fund its popular ‘sangat darshan’ programmes from these funds and taking a cue from this, the Congress government, on coming to power in 2017, launched a farm debt waiver scheme.
“The release of RDF was stopped (by the Centre) in 2021 since the kharif (paddy) procurement. A total of six procurements have been held after that. Despite repeated reminders and meetings with the Centre’s ministries of finance and food and PDS, the state government has not received RDF,” said an official of the rural development board (RDB), pleading anonymity. RDB is a sister concern of the state agricultural marketing board (mandi board).
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, the above quoted official added.
No RDF received since six crop cycles
The state government has not received RDF on procurement of 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.
₹2k cr to be raised for repair of rural roads
Unable to repair or carpet rural roads in the state, the mandi board is set to raise a loan amounting to ₹2,000 crore from the National Bank for Agriculture and Rural Development (NABARD).
According to information, the board has already sought requisition of roads to be repaired or carpeted from the deputy commissioners.
A senior official of the state government added that some of the rural roads have not been repaired since 2015. “More than 30% roads in the requisition list are those which have not been repaired since 2015,” added the official. As per an estimate, over 1,000 km of roads will be repaired if the loan is approved, the official added.