Kharif paddy procurement nightmare haunts TS govt

HYDERABAD: The state government is facing a severe financial crunch to purchase paddy grown in the recently concluded kharif season. As against the requirement of nearly Rs 20,000 crore, the Civil Supplies Corporation has only Rs 3,500 crore, according to official sources.

Every year the government borrows from banks to purchase paddy and repays the money after the Food Corporation of India (FCI) reimburses the amount. This year, the banks are unwilling to lend loans as the state government is yet to repay Rs 34,000 in loans from 2014-15.

The government has set itself a target to procure one crore tonnes of paddy for kharif, as the crop was sown in around 65 lakh acres, the highest-ever in the state. Accordingly, the government expects a record paddy production of 1.41 crore tonnes.

While nearly 41 lakh tonnes of paddy is expected to be either sold in the open market or used for seed production, the government has decided to set up over 7,000 procurement village-level centres to procure the remaining one crore tonnes.

The procurement started last week with the opening of 2,000 centres in Nizamabad and Nalgonda districts, where paddy stocks first arrive in the market. All districts will be covered next month.

The government recently invited tenders from banks and financial institutions Rs 20,000 in loans. They were given time from October 24 to 26. No bank filed a tender except Nabard, which restricted itself to Rs 4,000 crore.

The restrictions imposed by the Centre on market borrowings and off-budget borrowings of the state government from this year are also cited as reasons for banks not willing to offer fresh loans with a fear that the government may not be able to repay loans for a longer duration.