Rural Development Fund
Amid the row over farm laws, the Centre has told Punjab it won’t pay the Rural Development Fund (RDF) fee in paddy season. It has also asked for a letter asking the Punjab Government to explain its utilisation of the Rural Development Fund (RDF) that it gets largely from the Food Corporation of India (FCI) has enraged the state government.
Rural Development Fund
• Rural Development Fund is the 3% cess levied on the purchase or sale of agricultural produce under the Rural Development Fund Act, 1987 which is executed by Punjab Rural Development Board (PRDB) with the Chief Minister as its chairman.
• It comes mainly from central government’s purchase agency, Food Corporation of India, which buys around 13 million tonnes of wheat and 16 million tonnes of paddy every year.
• Usually Punjab gets Rs 1,750 crore every year — Rs 1,000 crore as 3% RDF for procuring paddy and the rest for wheat. This year, some estimates had put the total at Rs 1,850 crore.
• This fund is supposed to be used for the creation and maintenance of rural infrastructure in and outside mandis. But there have been charges in the past that it was diverted by the state for other purposes.
Rural Development Board
⮚ The Rural Development Board was incorporated in April 1987 under Rural Development Act, 1987 and is mandated with the promotion of better agriculture, and granting relief for the loss and damage to agricultural produce. It also provides the facility of streets lights, dharamshalas, panchayat ghars, canals and drains, government health infrastructure, drinking water, sanitation, and government educational institutions in rural areas.
⮚ The central government has alleged that the fund is being diverted, and has asked the state government to explain how it is utilising this money. It has also not made any provision for this fund in the cost sheet that it has sent to the state.
⮚ On the other hand, the state government is now claiming that it is being penalised for the protests against the farm laws that are raging in the state.
While any discrepancies in the utilization of the fund must be checked it is also important not to aggravate the centre-state relation especially with Punjab. Such disputes go against the spirit of co-operative federalism. A better way would have been to settle the dispute over the Farm Bill with various stakeholders through deliberations. To accommodate the differences in coherent way is the most pragmatic way out.