After a three-year standoff, Union Finance Minister Nirmala Sitharaman met AAP's Vikramjit Singh Sahni to discuss the release of pending Rural Development Fund (RDF) and Market Development Fee (MDF) payments to Punjab. The state seeks Rs 6,771 crore for RDF and Rs 1,516 crore for MDF.
After an impasse between the Centre and the Punjab government for over three years, now Union Finance minister Nirmana Sitharaman has met with Aam Aadmi Party Rajya Sabha Member Vikramjit Singh Sahni who requested her intervention to resolve the issue of payment of Rural Development Fund and Market Development Fee to Punjab.
The BJP-led Centre has been withholding the RDF for the last three years, and the Punjab government moved the Supreme Court against this in July 2023.
In the crucial meeting that hopes to bridge the gap between the Centre and the Punjab over the releasing of the pending RDF funds to the state, Vikramjit Singh Sahni, Rajya Sabha MP from Punjab and Member of the Parliamentary Consultative Committee on Finance reiterated to Union Finance Minister that Punjab cannot be compared with other states as it provides the highest production of 173 lakh metric tonnes of paddy and 125 lakh metric tonnes of wheat per year.
Rural Development Fund can be understood as the 3 percent cess levied on the purchase or sale of agricultural produce under the Rural Development Fund Act, 1987. Annually, Punjab alone procures wheat and paddy worth Rs 60000 crores for the centre. Until this year in April, Rs 6767 of of RDF is pending with the Centre. This rose significantly after Rs 13000 crores was added in the latest after procuring paddy recently.
AAP Rajya Sabha MP further requested the Finance Minister to convene a meeting of all concerned parties of the Centre and the State of Punjab for early resolution of the issue as according to the Punjab Government, Rs 6,771 crore for RDF and Rs 1,516 crore for MDF which are still pending.
Talks over the pending funds hit a deadlock after the Union government in 2022, had asked Punjab to reduce RDF and Mandi Development funds collectively by 2 per cent.
Punjab levies 3 per cent RDF and 3 per cent MDF each on the procurement of wheat and paddy collectively, making it 6 percent. The Centre in a long pending demand had been asking the state to reduce it collectively by 2 per cent.
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