Release market fee accrual, RDF: Punjab to Centre
The state has been seeking a market fee at 3% and according to data, an amount of ₹1,100 crore is pending market with the Centre. The pendency is since 2021.
The Punjab government has once again raised the issue of pending market fee accrual and rural development fund (RDF) with the Centre. In a letter to Union agriculture minister Shivraj Singh Chouhan sent last week, state food and civil supplies minister Lal Chand Kataruchak said that repeated reminders have been sent for the past three years and seven procurement seasons rabi (wheat) and kharif (paddy) but market fee funds are being sent at 2% rate.
The state has been seeking a market fee at 3% and according to data, an amount of ₹1,100 crore is pending market with the Centre. The pendency is since 2021, which means four paddy procurement seasons (2021, 2022, 2023 and 2024) including three wheat procurements and three wheat procurement seasons (2022, 2023 and 2024).
In case the Centre pays the state at the same rate during the current wheat procurement, the pendency will increase to nearly ₹1,400 crore. In case pending RDF are also included the pending sum increases to ₹8,250 crore.
“These funds are the state’s right and lifeline, and they will be beneficial for the state in giving a push to the development,” Kataruchak said, hoping that during the current wheat procurement, which is underway, the Centre will resume release of 3% market fee.
If the Union government releases a market fee at 3%, the state government is slated to get ₹867 crore, and at 2% the amount will be ₹578 crore, a state agricultural marketing board official said, pleading anonymity.
“We are in constant talks with the Centre and pursuing the release of market fee as fixed by the state government as accrual of taxes on food grain procurement is prerogative of the state. Farmers grow food grains for the central pool and state agencies and the Food Corporation of India procures the grain,” the officer with the Mandi Board added.
Pending RDF
A sum of ₹6,857 crore is also pending against the rural development fund (RDF), which the Centre has stopped since the paddy procurement of 2021. As per figures from the Mandi Board, since the four seasons of paddy (2021, 2022, 2023 and 2024), ₹1,110, ₹1,112, ₹1,170 and ₹1,200 are pending. For wheat procurement (2022, 2023, and 2024) ₹650 crore, ₹765 crore, and ₹850 crore is pending.
The state government has moved the Supreme Court seeking directions for the Centre to release RDF. The case is coming up for hearing on April 30 and the state government is hopeful of an early fruitful decision.
It needs to be mentioned that in 2021, when the RDF release was stopped, the Centre conveyed to the state government that the funds were being used on works other than maintenance of mandis and rural roads which supports the procurement.
The state government was conveyed to amend the Punjab Rural Development Act of 1987, which gives provisions for the imposition of a 3% tax by the state on food grain procurement in the form of RDF. The Aam Aadmi Party (AAP) government, on assuming power in the state in 2022, had amended the Act.
The Centre had informed the state that it would pay taxes lump-sum 2% on each procurement (rabi and kharif) on a par with other states, to which the Punjab government has objected.
