OTS policy for defaulting rice mills fails to get expected

Punjab government's one time settlement (OTS) policy has failed to get expected response from the defaulting rice millers against whom Rs 7,500 crore was outstanding, a senior official said today.
"The outcome of the OTS has not been up to the level of our expectations," Principal Secretary, Food, Civil Supplies and Consumer Affairs, K A P Sinha, said here today.
He said most of the defaulting rice millers were citing "liquidity crunch" as a major reason for not opting for the OTS.
There are a total of 1,537 defaulting rice millers in the state and their outstanding amount on account of undelivered rice or rice shortage was to the tune of Rs 7,500 crore.

However, Sinha asserted that the department had taken adequate safeguards in the custom milling policy to ensure the recovery of the outstanding amount from the defaulting millers.
The Punjab cabinet had approved the OTS policy in August to recover the outstanding amount.

Initially, the government anticipated a recovery of Rs 2,000 to 2,400 crore from the OTS policy.
Under the policy, the defaulters would have the option of paying the entire outstanding principal in one go, within a period of 45 days, without having to pay any interest, or to pay in three instalments with 10 per cent interest.
The defaulters choosing to pay back the principal as a lump sum amount would be entitled to go back to milling from the next season, the spokesperson explained.

The state government will again take up with the Centre for the clearance of Rs 1,500 crore of pending transportation charges, an official said.
"Earlier, rice millers used to get milling charges of Rs 15 per quintal. But now, the stance of the Centre is that Rs 15 includes transportation charges of up to a distance from zero to 8 km," he said.
The Punjab government has consistently been paying transportation charges for zero to eight km, he said.
The government of India conveyed that since it was part of Rs 15, it was not in a position to clear our bills, he added.

"Our stand has been that this was when this was not clarified, so we made the payment and the bills should be cleared," the official said.
"A solution was worked out under which the state government will recover Rs 3 per quintal from millers...If the arrears are cleared, then our claim for Rs 1,500 crore will get strengthened," he said.
To a query, Sinha said Punjab government had taken up with the Centre to settle the issue of the cash credit limit (CCL) related debt of Rs 31,000 crore, resulting from the CCL legacy gap of Rs 12,500 crore and the exorbitant interest of Rs 18,000 crore imposed on it by the Centre.

The said debt would require Rs 3,240 crore to be spent every year on debt servicing for the next 20 years at the cost of the welfare schemes of the state, he said.
Punjab Chief Minister Amarinder Singh had raised this issue with Prime Minister Narendra Modi and Finance Minister Arun Jaitley in this regard.
The state government had pointed that the gap had resulted from difference in actual expenditure and expenditure approved in cost sheet approved by the Department of Food & Public Distribution (DFPD), Government of India, and the inability of the state government agencies to fully repay the CCL.