The Punjab government has demanded the release of 1,760 crore outstanding Rural Development Fund (RDF) from the Center for the past two procurements of food grains – rice in 2021 and wheat in 2022.

Also, the government has asked the Ministry of Food, Civil Supplies and Public Distribution at the Center to allow 3% RDF against total procurement which has been reduced to 2% in 2020. State officials are expected to take up the issue during a meeting on Wednesday with the Union Agriculture Minister.

Beyond the calculus – 1,100 crore relates to 2021 paddy and the rest 650 crore for procurement of wheat earlier this year. These calculations are made on the basis of 3%.

In 2021, the Center stopped publication of the RDF by asking the state to amend the Punjab Rural Development Act, citing its use in the state’s rural development and procurement system.

“As required, we have amended the Act (Punjab Rural Development (Amendment) Act, 2022) and a gazette notification has been issued. We have also submitted details of the expenditure incurred by the state government in accordance with the principles laid down by the (Food and PDS) ministry,” said a communication sent by the state government to the Center recently.

In January 2021, the Center first announced that it would reduce the RDF levied by the state government from 3% to 1% as an interim measure for the upcoming wheat procurement, seeking information on the money being spent on infrastructure development to release the remaining amount.

The Center then asked the state to take an appropriate decision to release the remaining portion of the RDF after getting the necessary information. The then Congress party government remained indecisive on the issue of making amendments to the Rural Development Act, which was implemented by the Aam Aadmi Party (AAP) government when it took charge in March this year.

Development in the rural sector is a cause of concern for the state government, which is already facing an acute financial crisis and the RDF is a major source of revenue.

A provisional cost is pending for the current supply of paddy

Even though procurement of the current season’s fields began more than two weeks ago, the Center is yet to issue a provisional cost sheet mentioning the bills to be paid to the state for the procurement of rice. These accruals include, RDF, mandi tax, arhtia ‘ladies’ and transport and labor charges. According to practice, the cost sheet is issued before the start of procurement.

On Sunday, 3.6 lakh paddy arrived in the state’s mandis, taking the total arrival so far to 29.43 lakh tonnes. Of the arrivals, 28.23 million tons were procured, of which 28 million tons were procured from state agencies and 28,800 tons from private millers. The state food department has cleared 3,949.87 crores and 2,338.64 crores have been paid to the farmers.

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