Amid revenue dip, UP mulls Rs 2,000 crore bank loan to pay farmers against wheat procurement

The government is targeting the procurement of 5.5 million tonnes (MT) of wheat this season against the minimum support price (MSP) of Rs 1,925 per quintal (100 kg).

Published: 03rd May 2020 03:31 PM  |   Last Updated: 03rd May 2020 03:31 PM   |  A+A-

Uttar Pradesh Chief Minister Yogi Adityanath speaks during a pro-CAA rally in Kanpur Wednesday Jan. 22 2020. (Photo | PTI)

Uttar Pradesh Chief Minister Yogi Adityanath (Photo | PTI)

Express News Service

LUCKNOW: Uttar Pradesh government is in a tight spot as it has no fund to pay the farmers to procure Rabi crops.

As per the sources, the state government needs to raise Rs 2,000 crore in bank loans to pay farmers. The state cabinet had recently approved the proposal of the UP State Food and Essential Commodities Corporation Limited to raise Rs 2,000 crore from Bank of Baroda to pay farmers against wheat procurement.

The government is targeting the procurement of 5.5 million tonnes (MT) of wheat this season against the minimum support price (MSP) of Rs 1,925 per quintal (100 kg). So far, more than 0.8 MT of wheat has been procured by the various procurement agencies.

As the state faces a grim economic scenario with a dip in revenue flow in the first month of the current financial year (2020-21) due to prolonged lockdown, Yogi Adityanath government is back to drawing broad to chalk out a strategy to overcome the tough challenges ahead and also appoint a dedicated team of officers to address the upcoming economic issues.

Yogi on Sunday asked the officials at a recent review meeting, held to explore alternative sources to generate revenue, to consolidate the state coffers. It was also decided that the post-COVID economic strategy would focus on attracting investment from leading industrialized nations.

As per the sources in the finance department, the state government is facing a tricky situation as in the month of April, against the target of Rs 19,178 crore revenue, only Rs 281.12 crore revenue has been received. Moreover, despite these huge losses, the government gave salaries to its 16 lakh employees on time without any cut.

 “UP is among those few states which have neither cut nor delayed salary payments to its employees,” said Additional Chief Secretary Awanish Awasthi. He added that to overcome the difficult financial situation, the housing department had been asked to expedite the process of freeholding and compounding, so that it earned additional revenue to replenish the exchequer.

Besides, CM Yogi also emphasized putting in concerted efforts to attract fresh investment to cope with the prevailing circumstances.

In response to the reports that a number of companies planning to shift their manufacturing bases outside China following the corona crisis, the UP government has set off a process to identifying such corporate houses to target and convince them to invest in the state.

As per the highly placed sources, the state government is also making up its mind to make changes in the existing labour laws as demanded by some of those companies as a prerequisite to investment. The government reached this conclusion after a recent webinar organised by the state government. Over 100 US-based firms had participated in the webinar and had reportedly shown keen interest in putting units in UP.

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