BHUBANESWAR : With a market borrowing of Rs 15,000 crore and credit rating of A minus, the Odisha State Civil Supplies Corporation (OSCSC) has urged the State government to bail it out from the financial quagmire by extending guarantee for fresh loan to ensure uninterrupted procurement of rabi paddy and smooth implementation of food security schemes.
The State-run corporation sent the SOS to the Government after several public sectors banks including UCO Bank and NABARD refused to extend more credit with State government guarantee as collateral.
The recommendation of UCO Bank’s local branch for additional exposure of Rs 500 crore, over and above the Rs 1,700 crore working capital facility already extended, to the sanctioning authorities of the bank was turned down recently due to the unstable financial condition of the State PSU.
Echoing similar concern, NABARD, the biggest lender of Rs 5,000 crore in the loan portfolio of OSCSC, refused to raise its exposure any further without government guarantee or letter of comfort. “Other lenders including the Bank of India have sounded the need for heightened comfort from collateral of government guarantee/comfort letter,” the Food Supplies and Consumer Welfare department said.
The market borrowing of the corporation has hit the roof at Rs 14,850 crore and it might cross Rs 17,000 crore by the end of Rabi procurement of the current kharif marketing season (KMS). If not addressed and reimbursed immediately, it will go on increasing with every passing day. Of the total market borrowing, Rs 11,320.85 crore is due to interest costs amounting to Rs 4,700.85 crore up to March 2021 and Rs 6,620 crore for subsidy receivable from the Centre.
The stock-in-process and surplus godown stock of CMR have the combined effect of pushing OSCSC’s borrowingRs to Rs 14,850 crore, said a note of the department. While the Centre has not released the provisional subsidy for three quarters of 2020-21 financial year, food subsidy bill to the tune of Rs 6,620 crore is pending till April 30, 2021 of which Rs 1,547 crore pertains to 2020-21 and advance subsidy claim of Rs 1,500 crore stands receivable for the first quarter of 2021-22.
An amount of Rs 3,573 crore food subsidy is pending from 2003-04, the note said. The huge food subsidy bill is pending with the Centre despite repeated request by Chief Minister Naveen Patnaik and Food Supplies and Consumer Welfare Minister RP Swain to the Centre to release the amount as the State is facing funds crunch to carry out decentralised procurement of paddy.
Food subsidy bill
Rs 6,620 cr is pending till April 30, 2021
Rs 1,547 cr pertains to 2020-21
Rs 1,500 cr advance subsidy claim for 1st quarter of 2021-22
Rs 3,573 cr food subsidy pending from 2003-04