Punjab govt seeks ₹42,000 crore cash credit limit from RBI for upcoming paddy procurement season

The Punjab government has asked the Reserve Bank of India (RBI) and the consortium of banks to arrange a cash credit limit (CCL) of ₹42,000 crore for the upcoming paddy procurement season which is likely to start from October 1.

This kharif season, a total of 191 lakh tonne paddy is expected to arrive for procurement in the state’s grain markets (mandis). “We have started arrangements and have written to the Centre for releasing the funds,” said secretary (food and civil supplies) Rahul Tiwari.

The total arrivals this time are expected to go down against the last year’s highest-ever figure of 203 lakh tonnes, when a total expenditure of ₹46,000 crore was made on the procurement. The Centre has offered the minimum support price (MSP) of ₹1,940 on paddy for the upcoming season.

“This time, the grain arrivals are expected to fall by at least 10% of the last season,” said Tiwari, who held a meeting with the department officials for procurement arrangements.

The state food and civil supplies department is yet to supply the Centre rice worth ₹2,000 to match the accounts with the CCL received in 2019 and 2020 kharif marketing seasons. Tiwari said remaining ₹2,000 crore will be cleared in the days to come. “Also, it was decided in the meeting that stringent steps will be taken to stop arrival of paddy from other states so that Punjab’s CCL burden could be curtailed,” he added.

The department officials said a requisition for taxes imposed by the state government has also been sent in the form of a draft provisional cost sheet. “In the cost sheet, we have sought 3% each rural development fund and mandi fee besides 2.5% dami for the arhtiyas,” an official said.

In the previous two procurement seasons, the Centre had fixed dami of ₹45.88 per quintal. “Let us see how much the Centre allows this time,” the official added.

Food and civil supplies department officials said 10 lakh gunny bales are required for the upcoming procurement season. “We are in touch with the Jute Corporation of India in this regard. It was also decided of a total requirement, 5 lakh bales will be arranged by the department and the rest by the paddy shelling mills,” an official said.