The Central Government has favoured settlement of dispute in cash credit pertaining to the civil supplies corporations of the two Telugu States – Telangana and Andhra Pradesh – first. The subsidy portion may be resolved later.
Union Home Ministry joint secretary Ashish Kumar said that the settlement of the two issues could be done parallelly but without linking them together, otherwise the whole thing could get stuck and the interest would keep piling up.
The Home Ministry official was speaking at the joint meeting of the Chief Secretaries of the two States convened recently through video-conference.
Cash credit between the civil supplies corporations of the two States continues to be a vexatious issue evading solution for the past close to eight years.
The Telangana Government said that out of the total loan apportionment of ₹4,227 crore to Telangana, an amount of ₹4,917 crore along with interest had been paid by the State. The neighbouring State should claim ₹1,273 crore from the Central Government on the rice distributed in Telangana. Out of this, AP received ₹919 crore till 2017 and ₹355 crore could not be realised.
Suggesting that AP government could claim this amount from the Centre, the TS government said that cash credit was linked to the subsidy part and AP Civil Supplies Corporation had to claim this amount for Telangana. The State said there was no dispute regarding the amounts, only the subsidy which was claimable by the two States from the Centre.
The AP Government on its part said paddy procurement operation took place and the available cash credit with SBI was divided between the two States. Two thirds of the credit limit was utilised in Telangana amounting to ₹3,361 crore. The Telangana Government continued to repay 80 per cent of the amount till December 2020 leaving a balance of ₹627 crore + ₹138 crore of interest totalling to ₹765 crore. This amount had to be repaid and because of this SBI was not giving loans to AP.
The AP Government contended that because of violation of certain guidelines by Telangana, subsidy of ₹354 crore for Telangana was stopped and the amount was ₹650 crore in respect of Andhra Pradesh. It was reiterated that subsidy claim was not linked to cash credit and subsidy claim for ₹963 crore had already been submitted to the Centre of which Telangana was supposed to get ₹354 crore.
It was suggested that the Department of Financial Services convene a meeting between the two State Governments in which representatives of the Department of Food could participate. The MHA Joint Secretary had requested the Department of Food to look into the cash credit part with the Department of Financial Services and guide both the States accordingly.
