Centre rejects state’s request for paddy advance

The West Bengal government’s request for sanction of advance of Rs 1,000 crore for procuring paddy and rice has been turned down by the Centre,which has asked it to approach RBI/consortium of banks for cash credit.

“West Bengal is a Decentralised Procurement (DCP) state wherein it procures and distributes foodgrains itself and the foodgrain subsidy is released by the Government of India on a quarterly basis after distribution of foodgrains by the state government,” Union Food minister K V Thomas said . “Subsidy will be released as per existing procedure by the Government of India on receipt of claims after distribution of foodgrains,on quarterly basis,” Thomas said.

“The interest cost on credit taken for procurement of foodgrain is included in the economic cost and hence reimbursable. However,there is no provision for providing advance by Government of India for procurement of foodgrain by states. All states avail cash credit facilities from RBI consortium of banks for procurement of foodgrains,” the letter said.

Meanwhile,he said rice procurement in the state during 2010-11 till February 15 was 4.82 lakh tonne.