Pass law to check misuse of Rural Development Fund, Centre tells Punjab

Ruchika M Khanna
Chandigarh, March 28

In a significant development, the Punjab Government is learnt to have been told by the Centre to pass a law to ensure the Rural Development Fund (RDF) was used only for developing rural infrastructure if the state wanted the stopped central grant to be released.

Alleging misuse of the grant, the Centre has refused to release the RDF to Punjab for the wheat season beginning April 1. The AAP-led state government will lose Rs 1,750 crore per annum as RDF if it fails to pass the law.

The state government, therefore, is learnt to be considering to bring in an ordinance to amend the Punjab Rural Development Act, 1987. With this, it will bind the use of the RDF only for creating infrastructure in rural areas and do away with the clause that allowed use of this fund to repay the loan taken by the Punjab Mandi Board during the previous Congress regime. The RDF grant amounting to Rs 4,700 crore was reportedly diverted for repaying the loan taken to fund the previous government’s flagship ‘Farm Loan Waiver Scheme’.

Top officials in the state government have told The Tribune that the Union Ministry of Consumer Affairs, Food and Public Distribution had not calculated the RDF to be given on wheat purchase (3 per cent) in its provisional cost-sheet. They said the issue was to be discussed at the next Cabinet meeting, scheduled later this week.

While Punjab gets Rs 1,000 crore as RDF on paddy purchase, the remaining Rs 750 crore is earned on the purchase of wheat. The grant is given to the state by the Food Corporation of India. For the past three years, the Centre has been accusing Punjab of misusing the funds.

Following this, the previous state government had formed a committee, including then ministers of Finance, Rural Development and Food and Supplies, to see if and how the Punjab Rural Development Act, 1987, could be amended. This committee had reportedly given its consent to amend the clause 7 of the said Act. But before any decision could be taken, the model code of conduct for the Assembly polls was imposed. Ever since the NDA government has been at the helm, they have been asking Punjab to stop the “misuse” of these grants. Before the Congress government started using this fund to repay loan, the grant was used for the Sangat Darshan programmes of the then CM Parkash Singh Badal.

Sources said the state would have to immediately take the ordinance route to bind the use of the RDF only for creating infrastructure in the mandis, if it had to avail the Rs 750 crore RDF on the purchase of around 132 lakh metric tonnes of wheat.

Rs 1,750 crore at stake

• Rs 1,000 crore is received from Centre on paddy purchase
• Rs 750 crore the state gets on the purchase of wheat
• Rs 4,700 crore reportedly diverted by previous Cong govt

Diverted during previous govts

Congress: RDF used to repay loans taken by Punjab Mandi Board, also used for the govt’s flagship ‘Farm Loan Waiver Scheme’

Akali Dal: Grant used during the Sangat Darshan programmes of then CM Parkash Singh Badal