HYDERABAD: Telangana State Civil Supplies Corporation has 4,000 crore in its kitty to begin paying for paddy procurement and is seeking a bank guarantee from the state government to raise an additional 10,000 crore. The state government has paid 5,357 crore as interest on the loans raised for the purpose of making payments to farmers due to increased procurement in the last four years.
According to Telangana’s regular procedure, the state government would purchase paddy from farmers, pay them the minimum support price (MSP), which is 1, 960 per quintal this season. After custom milling, rice is supplied to Food Corporation of India (FCI), and the Centre reimburses the state government for the payment and management costs incurred later. Usually, the state takes a loan from banks through the civil supplies corporation to pay paddy procurement and milling charges.
This season, the state requires 14,000 crore as advance payment, and the interest rate has been rising over time. In 2018-19, the state had raised a loan of 12,829 crore and paid an interest of 844 crore; in 2019-20, the loan was 15, 175 crore and the state paid interest of 1,326 crore; in 2020-21, the state had raised a loan of 20,958 crore and paid interest of 1,619 crore; and last year, the state took loan of 29,804 crore and paid interest of 1,568 crore.
On several occasions, the state had stated that because the reimbursement was delayed, they had to pay additional interest to banks.
