No Rural Development Fund for Punjab against procurement of 132 Lakh MT of Wheat


The Punjab Government will not get any Rural Development Fund (RDF) for the 132 lakh metric tonnes of wheat it has procured for the central pool in the just-concluded wheat procurement season.

No Rural Development Fund for Punjab

The Centre, fixing the provisional economic cost of wheat, has imposed cuts on other incidental charges demanded by the Punjab Government. These include a cut in the commission given to commission agents, mandi labour charges, charges for packaging and transportation charges among others. In all, over Rs 70 per quintal has been deducted from the ex-mandi delivery price.

The state was to get Rs 2,333.89 per quintal , including Rs 1,975 per quintal MSP of wheat and incidental charges. But the state, after these cuts, will get Rs 2,181.64 per quintal.

While the RDF of Rs 59.25 per quintal has been cut on wheat (after it was cut on the paddy procured last year), cuts have also been imposed on deliveries to be made from mandis to FCI godowns and for deliveries from agency godowns to the FCI godowns. These cuts are on account of labour charges, transportation charges, custody and maintenance charges, besides interest charges. “If all these cuts are taken into account, the total cut imposed is Rs 150 per quintal,” said a senior officer in the Punjab government.

What is Rural Development Fund ?

It comes mainly from central government’s purchase agency, Food Corporation of India, which buys around 13 million tonnes of wheat and 16 million tonnes of paddy every year. This fund is supposed to be used for the creation and maintenance of rural infrastructure in and outside mandis. But there have been charges in the past that it was diverted by the state for other purposes.

The money with which the Punjab government used to assure the farmers to protect themselves from crop damage and used to get works related to street lights, dharamshala, panchayat buildings and drinking water, done in rural areas of Punjab; the Modi government by reducing that money was trying to disrupt the development works of Punjab.

Punjab Food and Supply Minister Bharat Bhushan Ashu said there was little doubt that Punjab was being targeted by the BJP-led government for the ongoing farmers struggle.

“This is like an undeclared emergency. On a government-to-government basis, there should have been some discussion before this arbitrary cut was announced,” he said, showing his displeasure. Officials in the Food and Supply Department say that since the sharp cut is not acceptable to Punjab, the state will refer the case to a committee to resolve the issue.

The Union government’s decision to withhold rural development fee from Punjab, and letters asking the Punjab Government to explain its utilisation of the Rural Development Fund (RDF) that it gets largely from the Food Corporation of India (FCI) has enraged the state government.

RDF is the 3 per cent cess levied on the purchase or sale of agricultural produce under the Rural Development Fund Act, 1987 which is executed by Punjab Rural Development Board (PRDB) with the Chief Minister as its chairman.

In the Cash Credit Limit extended to the state by Centre for agri procurement, the RD fee component is not accounted for in the provisional cost sheet . This means that Punjab cannot withdraw RDF from the CCL it has received.

The Central Government has not given rural development fund (RDF) to the Government of Punjab on the second consecutive crop. Earlier, in the Paddy season of October 2020 also, the Central Government had deducted the Rural Development Fund saying where it has been spent, first the State Government should give full details.

Punjab Finance Minister Manpreet Badal and Food and Supplies Minister Bharat Bhushan had also raised the issue of non-funding of rural development funds with Union Minister Piyush Goyal. Piyush Goyal stuck to the fact that the Centre will not release the Rural Development Fund.

Punjab collects Rs 1,000 crore as the RDF on paddy and another Rs 750 crore as the RDF on wheat.

Disclaimer :- This post is independently published by the author. Infeed neither backs nor assumes liability for the opinions put forth by the author.

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