In response to Punjab’s request for funds, the Center refuses to release them

In response to Punjab's request for funds, the Center refuses to release them
In response to Punjab's request for funds, the Center refuses to release them

Centre refuses to immediately release Rs 2,880 crore from Rural Development Fund (RDF) to cash-strapped state government. The state has instead been asked to reduce its “statutory charges”.

The RDF has not been received by Punjab for three procurement seasons. For the rabi marketing season earlier this year, and for the current kharif marketing season, the RDF has not been released since the beginning of the kharif marketing season in 2021.

There are currently Rs 1,120 crores of paddy procurement dues pending, in addition to Rs 1,760 crores due before paddy season started. Despite all other incidental charges to be accrued in paddy procurement, the Provisional Cost Sheet sent by the GoI to the state government does not mention this fund.

Minister for Consumer Affairs, Food and Public Distribution Piyush Goyal has written to the state government now, a copy of which is with The Tribune. According to him, the state government’s request to revise the Provisional Cost Sheet (for two previous seasons as well as the current one) is being examined according to the laws. Please consider reducing the statutory charges, particularly in the case of foodgrain procured for distribution to the poor and vulnerable.

By rationalizing statutory charges, the letter adds, the state exchequer’s subsidy burden will be reduced, and private players will be encouraged to procure grains at higher prices, thereby benefiting farmers.

The letter was sent to the state government after repeated reminders regarding the release of RDF dues by the state to the Ministry of Consumer Affairs, Food and Public Distribution.

Last year, just before wheat procurement began, the GoI reduced the RDF charged by the state from 3 to 2. A state government amendment was requested to the Punjab Rural Development Act before the 2021 paddy procurement started.

All pending payments for rural infrastructure creation/upgrading must be released starting in December. A government official said that if the RDF is not released soon, the government may have to borrow more money.