Procurement crisis over, RBI sanctions Rs 17,523-crore credit to Punjab govt
After days of uncertainty, the Reserve Bank of India (RBI) on Wednesday sanctioned a cash-credit limit (CCL) of Rs 17,523 crore to the Punjab government, bailing it out of the procurement crisis.punjab Updated: Apr 22, 2016 19:49 IST
After days of uncertainty, the Reserve Bank of India (RBI) on Wednesday sanctioned a cash-credit limit (CCL) of Rs 17,523 crore to the Punjab government, bailing it out of the procurement crisis.
The move comes 20 days after the start of the procurement season. The state government has set a target to procure 120 lakh tonnes of wheat in the current season for which it had sought a CCL of Rs 20,093 crore. The remaining amount is expected to be released next month.
The RBI had delayed the CCL as huge stocks of food grains were allegedly missing from Punjab godowns. This also delayed payment to the farmers who are waiting at the grain markets for their produce to be lifted at the minimum support price (MSP) of Rs 1,525 per quintal.
A communiqué from RBI reads: “We hereby authorise a credit limit of `17,523 crore under new account for the rabi-2016 season for procurement.”
State food and civil supplies secretary Raj Kamal Chaudhary said: “It’s good news for the state as the situation will ease now.”
The RBI also directed the Punjab government to regularise the procurement accounts of the rabi and kharif seasons and sought the audited statements of food credit accounts of the 2015-16 season and credit outstanding at the end of the March 2016.
Payment to begin from Friday
The state government said it would start clearing farmers’ dues from Friday. The state agencies have already procured more than 49 lakh tonnes of the wheat and owes Rs 8,500 crore to the farmers. “Funds are not a problem now. We have a system in place to deposit Rs 10,000 crore in commission agents’ accounts in one go who will make payments to the farmers,” said a state government official.
The state government was under fire for not being able to pay the farmers for their produce. On Monday, chief minister Parkash Singh Badal accompanied by food and civil supplies minister Adaish Partap Singh Kairon and officials rushed to Delhi and met Prime Minister Narendra Modi demanding immediate release of the Rs 20,000 crore CCL.
Earlier, the agencies have been asking the state government to settle the gap in the CCL received in previous years and the grain handed over to the Food Corporation of India (FCI). The RBI asked the State Bank of India (SBI), the lead bank, to send a report on good practices adopted by state in procurement process. However, the state officials were not quick to reply forcing the SBI to delay the release of the CCL.
Accounts in mess
The trouble started in 2014 kharif season when the centre asked Punjab to settle the outstanding amount of Rs 42,000 crore and refused to release funds for paddy procurement. After much persuasion, the state managed to get funds, but it became a routine exercise for state officials to convince the Centre for release of procurement funds. Even before 2014, the Centre had repeatedly asked the state government to settle accounts.
First Published: Apr 20, 2016 18:01 IST