Chief Minister Naveen Patnaik On Wednesday raised the issue of reimbursement towards additional interest incurred by state agency in procurement due to delay in release of subsidy by the Centre and the shortfall in allocation of rice to the state.

In a letter to Union Food Minister Ram Vilas Paswan, the Chief Minister drew his attention to the delay in release of subsidy and the mounting interest burden on state agencies.

Odisha started procurement of rice under DCP scheme from KMS 2003-04. The•procurement operations are infusing approximately Rs.8,000 crores, in the form of MSP payment, benefiting lakhs of farmers.

Odisha State Civil Supplies Corporation Ltd, a state run unit undertakes this by borrowing money from commercial banks at market rates.

As per the MoU with the central government for DCP operations, the centre is supposed to release subsidy in advance on quarterly basis in the first week of the concerned quarter.

But there is inordinate delay in release of subsidy and no provision to cover the interest cost on funds that are blocked.

From 2011-12 to 2016-17, OSCSC has paid additional interest of more than Rs.802 crores for such delayed release of subsidy from the centre, said CM Naveen Patnaik.

He requested Mr Paswan to allow reimbursement towards additional interest incurred by the state agency and also ensure timely release of subsidy.

The other issue related to shortfall in allocation of about 99,960 MT rice under NFSA for the period November 2015 to February 2017.

The CM said distribution of food grains to the beneficiaries under NFSA has been on since November 2015. The total quantity of rice and wheat to be distributed is calculated based on the options exercised by the beneficiaries out of the food grains combination of 5 Kg. per person per month for priority households (PHH).

During the period November 2015 to February 2017 there was a difference between Government of India’s allocation and food grains demanded by the beneficiaries.

This led to less allocation of 99,960.154 MT of rice and excess allocation of 7,322.05 MT of wheat by the centre.

In anticipation of allocation from the centre, the State Government distributed rice and wheat as per the options exercised by the beneficiaries, he said.

Since food grains have already been distributed, it is requested that 99,960.154 MT of rice may be released out of Central pool and the surplus wheat allocated, which has not been utilised by the State Government, may be withdrawn.