Fund crunch may hit paddy procurement

Ruchika M Khanna

Tribune News Service

Chandigarh, August 19

The shortage of funds has hit the Food and Civil Supplies Department hard. The distribution of dal, sugar and tea leaves has been put on hold because of the inability of the Finance Department to release funds. Even the money for buying paddy cannot be obtained because of the crisis.

The department needs Rs 1,600 crore immediately, but the Finance Department has expressed its inability to release the money now owing to a revenue deficit of Rs 1756.2 crore in the April-June first quarter.

In spite of budgetary provisions of Rs 1,100 crore to fill the gap in cash credit limit (CCL — money sanctioned by banks to the government for buying a crop), and Rs 500 crore for providing sugar, dal and tea leaves to beneficiaries, the authorities have not released any money.

As of date, other than wheat, no dal, sugar or tea leaves have been distributed. Wheat distributed to beneficiaries is from the funds released by the Union Government under the Food-for-All scheme.

The department needs Rs 1,098 crore to settle the gap in the CCL sanctioned in the last season for paddy procurement. This year, because of a 10 per cent higher (expected) paddy production, the state needs around Rs 32,000 crore CCL. But this will be sanctioned by the consortium of banks led by State Bank of India only when they clear the previous year’s CCL, which has a gap of Rs 1,098 crore. KAP Sinha, Secretary, Food and Supplies Department, when contacted, said they were trying to arrange funds, while the CCL limit would be released in time by the RBI.

Official sources say that the Food and Civil Supplies Department has held several meetings with the finance authorities, asking them to hurry up with the release of Rs 1,098 crore. With the farmers’ unrest over the delay in implementation of crop loan waiver and the continuing auction of their properties simmering, the government is keen on having a second smooth procurement of foodgrain.