Accord priority sector lending to procurement agencies : Tamil Nadu to P Chidambaram
The Tamil Nadu Government today sought the intervention of Union Finance Minister P Chidambaram to classify lending to procurement agencies like the State Civil Supplies Corporation (TNCSC) as priority sector lending.
Speaking at the conference of Chief Ministers and Finance Ministers of various Southern States and Union Territory chaired by Mr Chidambaram at Bangalore today, Tamil Nadu Finance Minister O Panneerselvam said the TNCSC has been procuring paddy between October and May every year under a decentralised procurement system for supplying rice under the Public Distribution System.
In his address, copies of which were released to the media here, Mr Panneerselvam said as the reimbursement of subsidy comes only later from the Union Government, the TNCSC needed cash to pay the farmers and hence it avails loans from various financial institutions.
"However, as of now, lending to TNCSC for paddy procurement is not considered as priority sector lending which results in high cost borrowings," he said.
Since this money was being used to make payments directly to the farmers, the State government sought the intervention of Mr Chidambaram to classify the lending to the procurement agencies like TNCSC for the purpose of procuring paddy from farmers as priority sector lending.
"This will help the procurement agencies to avail timely credit without much hardship," he added.