No Rural Development Fund, Punjab govt in a fix over Rs 4,500-cr loan interest payment : The Tribune India

quick links

States

Cities

Opinion

Life

Move Ahead

Classified

Reach Us

The Tribune

Punjabi Tribune

Dainik Tribune

No Rural Development Fund, Punjab govt in a fix over Rs 4,500-cr loan interest payment

Photo for representation only. - File photo

Ruchika M Khanna

Tribune News Service

Chandigarh, October 28

The state stares at a far bigger economic crisis as a result of the denial of the Rural Development Fund (RDF). This is because the government has pledged its future income accrued from the RDF to various banks for availing a loan of Rs 4,500 crore.

Manpreet Singh Badal, Finance Minister

Legal recourse open, says fm

We will reason out with the Centre on the denial of RDF. If they do not agree, legal remedy is available to us.

The Centre’s decision to “scrutinise the RDF” and not include this fund while making the provisional cost sheet for custom milled rice to be delivered to the Centre will mean that the entire loan taken against the RDF will have to be borne by the state. With its income shrinking because of Covid-induced economic crisis and the Central devolutions to Punjab, too, coming down, the debt-stressed state will be pushed to the edge in repaying the loan.

Yesterday the Union Ministry of Consumer Affairs, Food and Public Distribution, had written to the state, demanding to know what percentage of the RDF was being used for improvement of procurement centres. The letter also accused the state government of using the funds for other activities. The provisional cost sheet sent to the state yesterday had not included the payment of the RDF (at 3 per cent of minimum support price) to the state for paddy being procured now. Punjab collects Rs 1,000 crore as the RDF on paddy and another Rs 750 crore as the RDF on wheat. The issue is to be discussed in a meeting of the Rural Development Board to be chaired by CM Capt Amarinder Singh on Thursday.

Official sources told The Tribune that this annual income of Rs 1,750 crore was being used to repay the interest on the loan of Rs 4,500 crore that the government had availed for the Farmers Debt Relief and Debt Waiver Scheme and for implementing the Smart Village Scheme. While Rs 4,000 crore has been spent on the debt waiver scheme, Rs 500 crore has been spent on the first phase of Smart Village Scheme. A sum of Rs 1,200 crore has been reserved for the second phase, an official said.