Rs 1,000-cr jolt to Punjab as Centre ‘ends’ RDF, slashes MDF on wheat and paddy
The central government has now reduced Market Development Fee to 2% and Rural Development Fee to 0% in the provisional cost sheet for wheat procurement issued to the state government.
The wheat procurement season has recently concluded in Punjab and in a setback the Centre has now reduced Market Development Fee (MDF) to 2 per cent and Rural Development Fee (RDF) to zero per cent in the provisional cost sheet for wheat procurement issued to the state government.
The reduction in these charges is set to cost the state exchequer Rs 1,000 crore for the wheat procurement season alone.
The Centre has been paying Punjab the statutory charges (RDF and MDF) to the tune of 6 per cent on MSP of wheat and paddy at the rate of 3 per cent each.
Three months ago Union Food and Public Distribution Minister Piyush Goyal wrote to Punjab Chief Minister Bhagwant Mann to bring down the statutory charges to only up to 2 per cent of the minimum support price (MSP).
The state procures wheat and paddy to the tune of roughly Rs 66,000 crore per year. It gets Rs 3,600 crore on account of RDF and MDF annually by levying it at the rate of 3 per cent each.
This season the government estimates wheat procurement worth Rs 30,000 crore.
Upset with the latest communication, CM Mann tweeted in Punjabi to say that the reduction in RDF will cost the state Rs 750 crore and the reduction in MDF will cost Rs 250 crore more. “Will Captain (Amarinder Singh), Manpreet Badal, Bains brothers, Rana (Gurmit Singh) Sodhi, (Gurpreet Singh) Kangar, Fateh Jung Bajwa, Inder (Iqbal) Atwal, who have joined BJP recently, dare to raise the issue with (Prime Narendra) Modi ji?” he asked in the post.
The Centre has already not paid Rs 2,880 crore towards the RDF. Mann has met Goyal twice in Delhi for the issue and sought the pending dues from the wheat season of rabi marketing season (RMS) 2021-22. Earlier, the Centre withheld the RDF and restricted it to 1 per cent in the provisional cost sheet.
Goyal, in his letter to Chief Minister’s Office on January 9, stated that while the Centre is considering clearing the dues, the state should consider revising the levies.
He had stated that he had the matter examined and the Department of Food and Public Distribution (DFPD), Government of India, had already allowed 2 per cent market fee in the coat sheet for rabi marketing season (RMS) 2022-2023 and the matter for allowing of rest 1 per cent of market fee was under consideration in the department. The matter regarding allowance of Rural Development Fee at 3 per cent of MSP was also under consideration in the department as per rules, he had said. But the Centre has now allowed the state only 2 per cent of the levies rather than 6 per cent.
Earlier, the Centre had asked the state to give details on where it was spending the RDF and MDF. It had also asked the state to amend its Agriculture Produce Market Committee Act as it did not want the state to spend the RDF on farm loan waivers and subsidies. The state amended the Act also. But yet the Centre has not given its dues and rather refused to pay any RDF in future now.
On December 8 last year, Mann met Goyal and said that RDF is payable to Punjab Rural Development Board as per section 7 of Punjab Rural Development Act 1987, at the rate of 3 per cent of MSP. He said that RDF has been paid on regular basis since 1987 till RMS 2020-21 as per the rate notified by the state government till RMS 2020-21.
He said that the purpose of this fund is basically to promote the agriculture and rural infrastructure which ultimately add to the overall development of agriculture viz rural road network, marketing infrastructure, augmentation of storage facility, land record computerization, automation, mechanization of mandis and others.
