All clear for release of fresh cash credit limit


The sanctioning of Rs 5,000 crore by the Food Corporation of India (FCI) to the state government for settling discrepancies in payments made to the state for procuring foodgrains since year 1997 has paved the way for the release of cash credit limit, desperately needed by Punjab to pay farmers for the wheat procured.The sanctioning of the amount will help the state government settle its previous accounts of cash credit limit (between 1997-2014) with a consortium of 65 banks. This, in turn, will pave the way for the consortium, led by the SBI, to sanction the cash credit limit demanded by Punjab for the ongoing wheat procurement season.The RBI has already approved and sanctioned a cash credit limit of Rs 17,523 crore for the ongoing rabi marketing season. Though the state government had sought a cash credit limit of Rs 20,093 crore, the RBI authorised the release of Rs 17,253 crore. Government sources said this would be enough for procuring around 90 lakh tonnes of wheat.Though it was alleged by the Centre that grains worth Rs 12,000 crore were missing from the stocks in the state, the state, through a series of communications and meetings over past seven days, proved that no grain was missing.With this, the crisis over the payment to farmers for procurement of wheat that was giving sleepless nights to the Akali leadership seems to be finally over. The procurement began on April 1 and the farmers were getting restive due to non-payment of their dues.The government has already procured 48.73 lakh tonnes of wheat and payment worth Rs 4,000 crore is pending towards farmers.The consortium of banks was reluctant to release the amount to the state government citing the mismatch in accounts for the previous years.

Though the state government kept telling the consortium that a joint committee formed by the Union Ministry of Food was looking into the issue, the banks wanted the previous years’ accounts settled before granting any fresh sanction.The money has been received provisionally from the FCI against the pending payments for transportation, labour and storage costs as regards foodgrains procured by the state government on its behalf. Top functionaries in the Food and Supplies Department said with the RBI sanctioning the cash credit limit, after an “ok report” by the consortium of banks, the money would be released to the procurement agencies directly. In turn, the agencies would transfer the amount directly to the commission agents and farmers.“We are hopeful that the money will be released in a day, and it will be disbursed by tomorrow or latest by Friday,” said a department functionary. The consortium of banks has also been assured that all accounts for previous years will be settled once the joint committee submits its report. The report was expected to be released in two months, he said.Harcharan Bains, Adviser to the Chief Minister on national affairs, said the RBI had issued authorisation of cash credit limit (CCL) of Rs 17,523 crore towards the first instalment for the procurement. He said the RBI would issue another authorisation for the second CCL instalment for the current rabi season shortly.

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