Centre slashes state’s RDF on paddy procurement by 2%
Move an interim measure, Union ministry asks state to provide info on money being spent on infra development to release remaining amount
CHANDIGARH : The Centre on Tuesday reduced rural development fund (RDF) charged by the Punjab government on procurement of paddy from the existing 3% to 1% as an interim measure, seeking information on the money being spent oninfrastructure developmentso as to release the remaining amount.
This is for the first time that the central government has imposed a cut since the state started charging the fund.
The Union ministry of consumer affairs, food and public distribution conveyed this to the state food and civil supplies department calling it “an interim measure”, by which Punjab will be able to generate a revenue of Rs 410 crore from about Rs 41,000 crore spent on procurement of 205 lakh tonne paddy in the kharif season.
The state could have mopped up a whopping Rs 1,200 crore if 3% RDF was allowed.
“As an interim measure RDF is being allowed at 1% of MSP. The state government is requested to provide information on how and what percentage of RDF is being spent on improving infrastructure of procurement centres. Appropriate decision on the release of remaining portion of the RDF shall be taken once the requisite information is received. In case, relevant information is not received, the relief shall be subjected to necessary adjustment or recovery,” reads the ministry’s communiqué.
The development is a cause of concern for the state government which is already facing an acute fund crunch with RDF being a major revenue source. “We were expecting a better deal from the Centre,” state food and supplies minister Bharat Bhushan Ashu said.
As per a “provisional cost sheet” sent to the state government ahead of paddy procurement allowing taxes and incidentals, a clearance was given for dami (Rs 46 per quintal) to commission agents (arhtiyas) and 3% mandi fee. However, RDF was held back seeking its justification. The state government in its reply had said RDF was an important revenue source and crucial for rural development in Punjab. In December, state finance minister Manpreet Singh Badal and Ashu met Union consumer affairs minister Piyush Goyal to push for release of the fund.
Manpreet said the RDF is a statutory right of Punjab which centre can’t deny. The state has won a case in the court of law with RDF as a legal right and by denying it centre was on a weak footing.