Punjab government asks RBI for cash credit limit of 42,000 crore for next paddy supply season

The government of Punjab has asked the Reserve Bank of India (RBI) and the Consortium of Banks to organize a Cash Credit Limit (CCL) of ??42,000 crore for the next paddy supply season which is scheduled to start on October 1.

This Kharif season, a total of 191 lakh tonnes of paddy is expected to arrive for supply in state grain markets (mandis). “We started the arrangements and wrote to the Center to release funds,” Secretary (Food and Civilian Supplies) Rahul Tiwari said.

Total arrivals this time are expected to decline from last year’s highest figure of 203 lakh tonnes, while a total expenditure of ??46,000 crore was made on supply. The Center offered the minimum support price (MSP) of ??1,940 on paddy for the coming season.

“This time, grain arrivals are expected to drop by at least 10% from last season,” said Tiwari, who held a meeting with department officials for supply arrangements.

The state food and civilian supplies department has yet to supply the Center with rice worth ??2,000 to match the accounts with the CCLs received during the 2019 and 2020 Kharif marketing seasons. Tiwari said there was still ??2000 crore will be erased in the coming days. “In addition, it was decided at the meeting that strict measures will be taken to stop the arrival of paddy from other states so that the CCL burden from Punjab can be reduced,” he added.

Department officials said a requisition for state government imposed taxes was also sent in the form of a draft cost sheet. “In the cost sheet, we asked for 3% for each rural development fund and mandi fee in addition to 2.5% dami for the arhtiyas,” an official said.

During the previous two supply seasons, the Center had set amounts of ??45.88 per quintal. “Let’s see what the Center allows this time around,” added the manager.

Food and civilian supplies department officials said 10 lakh jute bales are needed for the next supply season. “We are in contact with the Jute Corporation of India in this regard. It was also decided on a total requirement, 5 lakh bales will be organized by the department and the rest by the paddy husking factories, ”said an official.