BHUBANESWAR: Pegging its working capital need for undertaking paddy procurement and related activities at Rs 12,000 crore, the Odisha State Civil Supplies Corporation (OSCSC) has sought State Government authorisation for availing credit from banks to meet its expenditure.
With a paid up capital of Rs 11 crore against authorised capital of Rs 15 crore sanctioned by the State Government, the State owned corporation is facing acute cash crunch to undertake a massive procurement operation. The delay in release of subsidy by the Centre every year has accentuated its financial stress further.
“In view of the increasing procurement of paddy under the decentralised procurement system, conversion of paddy into custom milled rice and its delivery to targeted beneficiaries under public distribution system, the working capital need of the corporation has gone up to Rs 12,000 crore. The paid up capital of the Government is remarkably disproportionate to the present business volume,” a senior officer of the corporation said.
Apart from procurement, the corporation required funds to meet other situational payment on some other items not incorporated in the business plan. The unusual delay in the release of subsidy by the Centre has further stressed the financial condition of the corporation. The cost over-run of OSCSC upto 2015-16 kharif marketing season was Rs 665 crore, the sources added.
Highlighting the problem of the corporation, Chief Minister Naveen Patnaik had written to the Centre in February for immediate release of the pending food subsidy bill amounting to Rs 3,655 crore. In a letter to Union Consumer Affairs Minister Ram Vilas Paswan, Naveen said such a huge pendency is causing shortage of funds for OSCSC affecting timely payment to farmers.
While approving a proposal to increase the cash credit limit of the corpopration to Rs12,000 crore, its board of directors in a separate resolution has urged the State Government to increase the authorised share capital and paid up capital suitably considering the present volume of business transactions. The State PSU procures paddy on behalf of the Government and borrows money from banks to pay the cost of the paddy directly to the farmers.
The State Government had procured a record 51.44 lakh tonne of paddy during the 2018-19 Kharif Marketing Season (KMS). An amount of Rs 9,002.15 crore was sent to the farmers’ bank accounts directly.