Maharashtra government to take Rs1,565 crore from contingency fund to repay tur dal loan

To buy the tur, as well as to pay the rent of the warehouse, the government borrowed ₹1,493 crore from two nationalised banks.

As there were no takers for the tur dal (pigeon pea) procured by the state government after paying the minimum support price (MSP) to farmers, the state has now ended up paying ₹119 crore towards the interest on the loan taken for paying the farmers and the rent of the warehouse to stock the agricultural produce. It has now decided to draw ₹1,565 crore from the contingency fund to pay the loan and interest outstanding for about a year.

Tur Dal - Food Grain (Representational photo)

Last year, the state had procured about 25 lakh quintals at MSP from the fallen prices. The tur had been procured at ₹5,050 a quintal, costing the state government ₹1,3000 crore. For this, it had borrowed ₹1,493 crore from two nationalised banks.

The government failed to sell the tur dal owing to the huge difference between the procurement price and the market price, and as a result, accumulated an interest of ₹101 crore.

It had decided in December to mill the tur and sell it as tur dal through the public distribution system for ₹55 a kg. However, only 1.78 lakh quintal dal has been consumed in five months against the expected stock of about 17 lakh quintals.

In a recent review meeting held by DK Jain, the state government decided to pay off the loan from the contingency fund to avoid the accumulation of the interest amount.

"The government ought to sustain a loss of more than ₹350 crore towards the gap between the procurement price and the selling price of the tur. Added burden of the interest and warehouse rent has added to the losses. To curtail the losses and avoid the audit strictures and criticism from opposition, the government has decided to pay off the loans with immediate effect," said an official from the cooperation department.

The state has decided to compel other departments, such as home and women and child welfare, to ensure consumption of the stock in prisons, anganwadis, and integrated child development schemes. It will also appeal to its 17 lakh employees to purchase a 5 kg tur dal from cooperation societies near their offices.

This year, the state also plans to expedite the milling of the pending stock, in order to reduce the burden of the rent paid to the warehouses to stock the tur. "The stock has been stored in 153 godowns at a rent of ₹1.5 crore a month," another official from food and civil supplies department said.