RBI approves Rs 26,000 crore CCL for paddy procurement in Punjab

The Reserve Bank has given approval to Rs 26,000-crore cash credit limit (CCL) for purchasing paddy in poll-bound Punjab, which came as a relief for SAD-BJP combine that struggled hard in the past for release of funds to buy foodgrain.

"RBI has given its approval for the Rs 26,000 crore of CCL for procuring paddy from Punjab," Punjab Mandi Board Vice-Chairman Ravinder Singh Cheema said on Monday.

"Now, the state government will seek approval of the Centre by sending the RBI's approval letter for the release of funds for the purchase of paddy," said Cheema.

Paddy procurement in Punjab will commence from October 1 and the state is expecting procurement of 150 lakh tonne of crop from the state.

RBI's approval for CCL assumes significance as SAD-BJP combine would not have liked any delay in release of CCL in the wake of high-stake assembly polls ahead.

The SAD-BJP combine had faced wrath for the delay in the release of CCL on many occasions over the mismatch between value of physical stocks of foodgrain and money spent through CCL for buying wheat and paddy.

Facing massive criticism, then SAD-BJP combine had to approach Narendra Modi-led central government for release of funds for buying foodgrain even as sanctioning of CCL remained a contentious issue between Punjab government and Centre.

In the last Rabi marketing season when CCL was delayed, Congress had accused Parkash Singh Badal-led government of having involved in Rs 12,000 crore "foodgrain scandal". It alleged that RBI had directed all banks involved in lending to Punjab government's 'Food Borrowing Programme' to provide for "potential losses" as foodgrains that were supposed to have been bought, had "vanished" from godowns.

Cheema accused the then RBI Governor Raghuram Rajan of "creating unnecessary obstacles" in release of CCL to Punjab.

"Actually, it was because of last RBI Governor who created problems for us (Punjab) by imposing so many unnecessary conditions for release of CCL," Cheema alleged.

Union Finance Minister Arun Jaitley, who had come to Jalandhar on September 18, had described dispute over CCL as "a historical problem", saying both the state and Centre were making efforts to resolve this issue.

"There is a historical problem and it exists for decades, which requires certain amount of reconciliation and sorting out. Both Punjab government and central government are in the process of finding a solution to that," Jaitely had then said to a question.