The State Government has permitted the Telangana State Civil Supplies Corporation (TSCSC) to avail an additional loan of ₹ 25,000 crore to meet the procurement expenditure of paddy, fine rice (sannabiyyam), and other requirements for Rabi 2019-20.

The government had agreed to give guarantee for the ₹ 25,000 crore additional loan, which is over and above the ₹ 20,000 crore for which it had already given a guarantee. The decision comes in the wake of a request made by the TSCSC.

Procure up to the last kilo

The Corporation made the request in view of the huge quantity of paddy expected during the current rabi season as well as the prevailing lock down situation. In fact, Chief Minister K. Chandrasekhar Rao has announced that the government would procure the entire commodity cultivated by farmers “upto the last kilo”.

Moreover, the government will procure the entire commodity ensuring payment of Minimum Support Price to farmers. Procurement would be taken up village-wise to prevent overcrowding at market yards as a precautionary measure. Keeping in view the urgency as the procurement process is likely to start in a couple of days, the TSCSC has been allowed to avail an additional loan from nationalized banks with the government guarantee.

Pay 2% guarantee commission

In its orders, the government has asked the TSCSC vice-chairman and managing director to pay a guarantee commission of two per cent to the nationalized banks for the entire guarantee period as it could not be exempted under the Reserve Bank of India guidelines. It has also been asked to negotiate with the banks for the lowest possible interest rate for the loan.

Further, the TSCSC had been directed to utilize the loan amount only for the sanctioned purpose and “not for any other purpose”.