‘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

The Economic Times - - Sports & Economy - Mad­hvi.Sally@ times­group.com

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

AC­TION TAKEN

(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.

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