Bhopal: Centre finds fault with state’s onion purchase policy

Bhopal: The Central Government has reached to the conclusion that the state government had bungled while purchasing onions from the farmers at the rate of Rs 8 per kg. Not only was the price too high, but the quantity was also too much. According to the Centre, the state should have purchased onions at the rate of Rs 5.86 per kg and it would take factor in this price while calculating the amount to be reimbursed to the state.

According to the Centre, the state government should not have purchased more than 25 per cent of the onions produced in the state. Under its Market Intervention Scheme, the Centre does not reimburse the money spent on procurement of agricultural or horticultural produce if the quantity purchased is more than a quarter of the total production.

That would mean that the state would get only Rs 78cr from the Centre against the Rs 700 cr spent in on procurement of onion. The state has spent an additional Rs 100 cr on packaging and warehousing of the root vegetable. The Central Government has fixed the extra expenses at Rs 1.46 per kg and would reimburse 12.5 per cent of the amount calculated at this rate to the state.

The state government had bought 8.76 lakh MTs of onions at the rate of Rs 8 per kg from the farmers. The state government, which is already in the throes of a fiscal crisis, may land in further trouble because of the Centre’s decision to reimburse a little more than 10 per cent of the amount spent by it.

Sources said that the MARKFED, which had made the purchases, already owes more than Rs 40 cr to the farmers. The amount spent by MARKFED would be reimbursed to it by the government only after cabinet clearance. The state government had set aside an amount of Rs 580 cr in the second supplementary budget for onion purchase.

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