Punjab government asserts all food grains procured duly accounted for and handed over to FCI

Chandigarh, April 15, 2016: The Punjab government today asserted there was no disappearance of stocks as slated in a section of the media and that all food-grains procured over the years have been duly accounted for and handed over to the FCI, through well-documented audited transactions.
According to the Director Food and Civil Supplies - Mr Shivdular Singh Dhillon all payments are released by FCI directly to the bank without recourse to the State, after receipt of stocks and as per the specification fixed by GOI. These deliveries are dependent on the schedule fixed by FCI from time to time as per demand in various parts of the country. He asserted that all the queries raised by FCI have been satisfactorily answered by the Punjab government
The Director Food and Civil Supplies said the so called ‘gap’ which had been referred to was the result of the difference between actual costs and reimbursements made by the GOI/FCI pertaining to interest, transportation, incidental charges and other expenses which are based solely on the “provisional cost sheets”, or “final cost sheets”, as and when prepared by them. He said further as the State availed huge Cash Credit Loans from the commercial banks to fund the procurement activities, non-reimbursement of actual leads to ballooning of the interest component, which is being compounded on a monthly basis by the lending Bank.
The matter regarding the out standings/receivablespertaining to the Food Credit account of the State is already under discussion with GOI. A Joint Committee of GOI and State Government has been looking into the gamut of issues on this account, and the matter is being deliberated upon so as to settle the claim of the FCI/GOP.
Mr Shivdular Dhillon said funds availed by the State government on account of Food Credit Limits have been utilised for food procurement operations, in the National Interest. There has been no misutilisation of funds. The differential amount is on account of difference between claims and amounts received.
For procurement purposes, the State on the basis of procurement targets fixed by DFPD , has over the years been authorised Cash Credit Limit by the RBI. This limit is released to the State Govt after the Consent for the same is given under article 293(3) by Ministry of Finance GOI, by the Consortium of Banks led by the SBI, and repayment of the same is made after delivery of food grains. The claims are submitted by the State government, post-procurement, and accepted by the FCI based on the “Provisional Cost Sheets”. The provisional cost sheets are made final only after submission of claims by the food agencies, and the differential paid to the State agencies/State government after finalisation. Prior to 2003-4, all the procurement expenses used to be reimbursed to State Agencies, but from 2004 onwards, these procurement expenses are based on the ‘principles’ as determined by the GOI.
The Director explained that in Punjab, procurement is carried out by FCI and 5 State Agencies of State Government. Foodgrains are procured at MSP (as fixed by Central Govt.), and delivered to FCI. Here it is important to add that the procurement costs are reimbursable by FCI to procurement agencies to offset their expenses. The same is done on the basis of Provisional Costs Sheet as prepared by the Dept. of Food & Public Distribution (DFPD), GOI, for the particular season. These Cost Sheets contain details of reimbursables such as MSP, Statutory and Non-Statutory Taxes, Transportation, Labour and Handling charges, Custody and Maintenance charges, Interest charges, cost of Gunny Bales.