Punjab Chief Minister Parkash Singh Badal today sought Prime Minister Narendra Modi's intervention for financial restructuring of the outstanding loans of the financially ailing NAFED to bail out the organisation of marketing cooperatives in the country.
In a letter to the Prime Minister, Badal said NAFED this premier organization was set up with the main objective to promote and develop agricultural marketing through its member constituents at the State and primary level for the welfare of farmers.
He said since its inception in 1958, National Agricultural Cooperative Marketing Fedration (NAFED) has been playing a vanguard role in protecting the interest of farmers across the country, an official release said here.
Badal apprised the Prime Minister that under the Price Support Scheme (PSS) of the Union Government, NAFED has came to rescue of farmers in a big way.
In 1976-77, the Centre had designated NAFED as its Nodal Agency under this scheme for procurement of major oilseeds like Mustard, Soyabean, Groundnut, copra and pulses like Gram, Moong and Urad besides the cash crop like Cotton.
The Chief Minister said in the last few years, NAFED had borrowed funds from various public sector banks but with the passage of time, due to poor recovery, these bank loans turned into Non Performing Assets (NPAs) as the organisation did not have funds to service these loans.
He bemoaned that as on date, total outstanding loans of the banks, including interest stood at nearly whopping Rs 1,800 crore.
Pleading the case for financial restructuring of the outstanding loans of NAFED, the Chief Minister said that a request in this regard had been pending with the Union Ministry of Finance.
He informed the Prime Minister that in the past many meetings have been held in this regard in the Department of Financial Services and Ministry of Agriculture.
He said in consultation with the banks, the SBI Capital Markets Ltd (SBI Cap) was engaged to prepare a financial restructuring package suggesting balanced level of commitments/sacrifices from all the stakeholders and to ensure long-term financial viability of NAFED.
Giving brief details of this proposal, Badal said it envisaged Rs 590 crore interest free advance from the Centre and Rs 450 Crore Government Guarantee for raising loans from banks and NAFED's own contribution of Rs 59 crore to settle the bank loans of Rs 1,832 crore as on March 31, 2012 at 60 per cent - Rs 1,099 crore.
