‘Punjab told to Reconcile Food Accounts’
Food minister Paswan says his ministry also wants to ensure that Punjab has adequate credit facilities so that farmers do not suffer
New Delhi: The Centre has asked Punjab to reconcile its food accounts, and an official committee is examining the matter, food minister Ram Vilas Paswan said in response to ET's report that RBI had asked banks to take a hit because the state's loans for buying grain were not matched by actual food stocks. Paswan, who is scheduled to visit Punjab this week to discuss issues related to food procurement, said his ministry also wanted to make sure that Punjab has adequate credit facilities so that farmers do not suffer.
Farmers depend heavily on national grain procurement agency Food Corporation of India (FCI) and the state’s agencies to sell their output at an attractive price fixed by the government.
“There's a committee already looking into the Punjab reconciliation issues. An officer of finance ministry heads the committee and officials of State Bank of India, other banks and joint secretary food procurement and officials from the Food Corporation of India are members,” Paswan told ET. Officials said Paswan will be in Chandigarh on Monday and is scheduled to meet Punjab food minister Adesh Partap Singh Kairon and FCI officials.
“The food minister will be visiting Asia’s biggest grain market, the Khanna mandi, along with the ministers and senior officials of state government on Monday. Various issues will be discussed,” said a Punjab government official.
Punjab government officials said they have yet to raise loans from consortium of banks to meet working capital requirements for this season. Out of the procurement target of 30 million tonnes by FCI and states, Punjab is expected to procure 11 million tonnes of wheat. The minimum support price
(MSP) for wheat has been fixed at .₹ 1,525 per quintal for this season.
Paswan said he wants to ensure that the interest of farmers is protected. “To protect farmer’s interest we’ve been writing to the finance ministry to ensure sufficient cash credit limit to the state of Punjab,” he said.
The Reserve Bank of India has asked banks to make provisions for loans taken for food procurements but not matched by actual stocks. This could burn a hole of .₹ 12,000 crore in the books of banks, which are already stretched by astronomical bad loans in the industrial sector.
The Punjab government, however, denied any disappearance of stocks, and said all food grains procured over the years have been duly accounted for and handed over to FCI through well-documented audited transactions.
The controversy came just as farmers are harvesting wheat and preparing to sell to official agencies.