NEW DELHI: The Food Corporation of India (FCI) underneath the central authorities has helped the Punjab authorities tide over a crisis which might have hit wheat procurement scheduled to begin from April 10, by lifting 22.42 million tonnes of the foodgrain held with the state businesses since 2018-19. Failure to clear the stock would have are available in the way in which of the Punjab authorities to take advance loans from banks to pay the MSP to farmers for the recent procurment.
In Punjab, farmers promote their foodgrains to 5 state procuring businesses (SPAs) they usually pay the cash to farmers. Later this quantity is reimbursed by FCI. To pay the quantity to farmers instantly, these state businesses take advance mortgage from an SBI-led consortium of banks. As per guidelines, this Food Credit advance needs to be repaid inside three years. But the Punjab authorities couldn’t pay the mortgage of Rs 89,000 crore from 2018-19 because the stock was nonetheless to be lifted.
Punjab avails Cash Credit Limit (CCL) from a consortium of banks which is called Food Credit Consortium, led by SBI. The CCL is sanctioned for every season individually, relying upon the funds required for estimated procurement amount. The Centre offers consent for such mortgage to the state authorities. These CCLs are secured by the meals grains shares held by the state procuring businesses. FCI makes funds to SPAs after the foodgrains are lifted by it.
Due to non-compensation of advances taken by SPAs, the Punjab authorities was dealing with the issue of their mortgage turning into NPA on March 31 (Wednesday). “As the RBI had declined to further extend the deadline, the outstanding was going to become NPA. If this had happened, the state agencies would not have been able to take any further advance from banks to pay upfront to farmers. This could have led to a disastrous situation,” stated a supply.
In a letter addressed to Punjab Chief Minister Amarinder Singh, Food Minister Piyush Goyal had talked about that the state authorities had in February urged the meals ministry and FCI to evacuate 22.42 million tonnes of wheat stock held by the state businesses. Goyal had assured that the full stock could be evacuated to keep away from any crisis.