Pass legislation to control misuse of Rural Development Fund, says Center in Punjab : The Tribune India

Tribune press service

Ruchika M Khanna
Chandigarh, March 28

In a significant development, the Punjab government was reportedly advised by the Center to pass a law ensuring that the Rural Development Fund (RDF) would only be used to develop rural infrastructure if the state wanted the stopped central grant to be released.

Alleging misuse of the grant, the Center refused to release the RDF in Punjab for the wheat season commencing April 1.

Therefore, the state government is considering passing an ordinance amending the Punjab Rural Development Act 1987. With this, it will tie the use of RDF only to create infrastructure in rural areas and remove the clause that allowed this fund to be used to repay the loan taken out by the Punjab Mandi Board under the previous Congress regime. The RDF grant of Rs 4,700 crore was allegedly diverted to repay the loan taken out to fund the previous government’s flagship program, the Farm Loan Waiver Scheme.

Senior state government officials told The Tribune that the Union Department of Consumer Food and Distribution had not calculated the RDF to be granted on the purchase of wheat ( 3%) in its provisional cost sheet. They said the matter was to be discussed at the next Cabinet meeting, scheduled for later this week.

While Punjab gets Rs 1,000 crore as RDF on buying paddy, the rest Rs 750 crore is earned on buying wheat. The grant is provided to the state by the Food Corporation of India. For the past three years, the Center has accused Punjab of embezzling the funds.

Following this, the previous state government had formed a committee, then comprising the Ministers of Finance, Rural Development and Food and Supply, to see if and how the Punjab Rural Development Act 1987 could be modified. This committee would have given its agreement to modify article 7 of the said law. But before any decision could be made, the model code of conduct for Assembly ballots was imposed. Since the NDA government is at the helm, it is calling on Punjab to end the “misuse” of these subsidies. Before the Congress government started using this fund to repay the loan, the grant was used for former CM Parkash Singh Badal’s Sangat Darshan programs.

Sources said the state should immediately take the ordinance route to tie the use of the RDF solely for the creation of infrastructure in the mandis, if it were to avail the RDF of Rs 750 crore on the purchase of about 132 lakh metric tons of wheat.

Rs 1,750 crores stake

  • Rs 1,000 crore is received from the Center on purchase of paddy
  • Rs 750 crore the state gets on the purchase of wheat
  • Rs 4,700 crore allegedly embezzled by former Cong government

Hijacked by previous governments

Congress: RDF used to repay loans taken out by the Punjab Mandi Board, also used for the government’s flagship Farm Loan Waiver Scheme

Akali Dal: Grant used during Sangat Darshan programs of then CM Parkash Singh Badal

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