CAG also Raised Questions
“How can we? The state has to come up with a concrete proposal on how they would repay and reconcile the stocks without which we won’t lend.”
There is a standoff between the lenders and the state after the Reserve Bank of India ordered them to provide for potential losses following the discovery of a gap between the amount of food stocks and the funds that were borrowed to buy them. With provisioning at 15%, this could mean the banks having to set aside .₹ 1,800-3,000 crore at a time when an RBIdirected cleanup of the books has been taking a toll on their earnings. ET first reported the matter on April15. To be sure, the loans are yet to be classified as bad debt. Bankers are scheduled to meet on Monday to discuss the issue and are planning to lobby the regulator this week against the provisioning while raising the sovereign debt question.
The Punjab government said there had been no misuse of funds, pointing out that the grain purchases are on behalf of the entire country and go toward the central pool. “Funds availed by the state government on account of food credit limits have been utilised for food procurement operations, in the national interest,” the Punjab government said on Friday.
“There has been no misutilisation of funds, and… the differential amount is on account of difference between claims and amounts received.” The state government has said that it has been in discussions with the central government about the matter. “The matter regarding the outstandings/receivables pertaining to the food credit account of the state is already under discussion with Government of India,” it said. “A joint committee of GoI and state government has been looking into the gamut of issues on this account, and the matter is being deliberated upon so as to settle the claim of the FCI/Government of Punjab.”
Separately, the Comptroller and Auditor General has raised questions regarding the state’s food grain procurement through various state agencies. The auditor had sought details of vehicles used to transport foodgrains and found that the numbers provided did not match. Of the randomly selected 3,319 trucks supposedly used for transportation, CAG could not trace 3,232 of them, i.e. 97.38%. And, of the 87 registered vehicle numbers that it traced, 15 turned out to be those of scooters, motorcycles and cars.