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MP cabinet approves scheme to help govt procurement agencies

The announcement comes at a time the MP government has suffered a cumulative operation loss of nearly Rs 6,000 crore in procurement of grains, and another Rs 12,000 crore is stuck in unsettled accounts of grains procured by the Centre.

Written by Iram Siddique | Bhopal |
January 5, 2022 4:12:00 am
Until March 2021, the MP government had a debt of Rs 2.5 lakh crore in loans, which exceeded its budget of Rs 2.41 lakh crore. The government presently pays Rs 20,942 crore every year as interest.

The Madhya Pradesh government in a Cabinet meeting Tuesday gave its nod to MP Mukhyamantri Krishak Uparjan Sahayta Yojna, a scheme aimed at providing budgetary allocation to enable government agencies such as Food and Civil Supplies Corporation and Markfed to tide over operational losses incurred during procurement of grains from farmers.

The announcement comes at a time the MP government has suffered a cumulative operation loss of nearly Rs 6,000 crore in procurement of grains, and another Rs 12,000 crore is stuck in unsettled accounts of grains procured by the Centre.

The MP government procures grain through the Department of Food Civil Supplies and Consumer Protection, along with MP Markfed. It receives payments for procured grain from the Centre after the stock is lifted. These agencies in turn borrow loans to pay farmers within 10 days, while awaiting its dues with the Centre to be settled.

“This scheme had been brought to ensure agencies such as MP Markfed out of the vicious cycle of paying heavy interest on loans taken to ensure procurement and timely payment to farmers,” state Agricultural Minister Kamal Patel said. “If the present set-up continues without any interventions, these departments reeling under huge debts will not be able to undertake procurement.”

He also said that in cases of many crops, and pulses such as moong, the state government procured around 1 lakh metric tons against the stipulated procurement limit of 95,000 metric tons set by the Centre.

The move was undertaken to ensure farmers get a fair market price. However, the cost of increased procurement was borne by the state government through loans. But the dues are paid back to the state government only once the stock is lifted from the godown.

A senior state official said that in cases where stocks are not taken, refused, or rejected, the operation and other procurement cost is entirely borne by government agencies.

Until March 2021, the MP government had a debt of Rs 2.5 lakh crore in loans, which exceeded its budget of Rs 2.41 lakh crore. The government presently pays Rs 20,942 crore every year as interest.

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