Reforms panel calls for probe into ~31,000cr CCL gap, its settlement

Gap between central funds and grains procured was turned into 20yr loan

FINANCE DEPT IN WHITE PAPER LAST YEAR SAID ENTIRE BURDEN COULD NOT HAVE BEEN PUT ON STATE WITHOUT CONTRIBUTION FROM BANKS, CENTRAL GOVT

CHANDIGARH:The Punjab Governance Reforms and Ethics Commission (PGREC) has recommended a thorough probe into the Rs 31,000-crore cash credit limit (CCL) gap and its settlement, for fixing the responsibility.

The commission headed by former chief secretary KR Lakhanpal, which examined the legacy food credit account and its settlement in detail, made the recommendation to the state government last month. “The probe should look into accumulation of such a huge liability, and the propriety of the settlement, in terms of rules of business and cannons of financial prudence. There is a need to get to the bottom of how it happened and identify those responsible,” said a government functionary in the know of the matter who did not want to be identified.

The commission, while laying emphasis on the need for the government to actively pursue “fair apportionment” of the gap, has also suggested to the state government to keep costs within the principles of procurement incidentals, take bank guarantee from millers for paddy given to them to check misappropriation, and ensure geo-tagging for physical verification of stocks to avoid a repeat. CCL is given by the Centre to the state to buy foodgrains.

“The cabinet sub-committee on governance reforms comprising chief minister Capt Amarinder Singh, finance and governance reforms minister Manpreet Singh Badal and minister in-charge of the department will take the call on the recommendation,” the official said, requesting anonymity. The sub-committee was set up at the time of recast of the government reforms commission in November 2017.

The recommendation is important, because the Rs 31,000 gap, between cash credit limit availed over the years and the foodgrain stocks held in the account books of the state procurement agencies since 2004, remained under wraps for several years. When things tumbled out, the mess became a hotbutton political issue for the previous SAD-BJP, triggering allegations of a scam.

The state government, which was facing difficulty in securing CCL for procurement of wheat and paddy, signed an agreement with the Union finance ministry on March 10, 2017, a day before the assembly election results, to settle the amount by paying Rs 3,240 crore a year for the next 20 years — a total of Rs 64,800 crore.

Despite the pre-poll noise, the Amarinder Singh government, which took over on March 16, could not do much. The finance department, in its white paper on state finances released around the same time last year, said that the entire burden of settlement of outstanding accounts could not have been put squarely on the state without any contribution from the central government or the banks; and that the previous government accepted it, burdening the citizens with a huge debt.

“This was done even without the elementary precaution of going into the reasons for the emergence of such a huge gap and fixing responsibility of the officials of the state procurement agencies,” the white paper said, adding, “The alacrity with which this was done not only provided a convenient cover to the various acts of malfeasance, but the urgency to recover the due amount from the Government of India and the opportunity to strike a fair bargain with them and the banks was also lost.” it concluded.

While several Congress MLAs also pressed for an inquiry, including by the Central Bureau of Investigation (CBI), the government said it was carrying out a third-party audit.