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It decided to reimburse states the amount of value-cut imposed on the purchase of wheat affected by unseasonal rain. The move, approved by the Cabinet, is also aimed at boosting procurement, estimated so far (it began this month) at 15.86 million tonnes, about 6.3 per cent less than in the same period last year.
The Centre had relaxed the wheat procurement norms in the major growing states of Punjab, Haryana, Uttar Pradesh, Rajasthan and Madhya Pradesh to enable farmers to sell grain damaged by unseasonal rain and hail to Food Corporation of India and state agencies.
In Punjab, by the new norms, the Centre would purchase up to 10 per cent of broken and shrivelled grain, as against the existing norm of six per cent. However, it will deduct Rs 3.62 a quintal for wheat having six to eight per cent of such grain; if between eight and 10 per cent, an amount of Rs 7.25 a qtl will be deducted from the Minimum Support Price (MSP). There are prices set for other damage levels, too, and separately for Haryana and other major producers.
However, in many instances, the states were supplementing the cut from their own resources to ensure that farmers get the full MSP of Rs 1,450 a qtl. Punjab is one such state.
Wednesday's decision, officials said, would cost the exchequer Rs 100-150 crore, which it would give to the six states to enable them to pay the full MSP to farmers.
Standing rabi crops in almost 19 million hectares were impacted in the recent rain and hail, almost 30 per cent of total sown area.Wheat production is expected to fall by four to five per cent from the initial estimate of 95.76 million tonnes.
The Centre has fixed the wheat procurement target at 30.05 mt in the 2015-16 marketing year (April 2015- March 2016), as against 28 mt bought by FCI last year.
Other decisions
Cotton
The Cabinet Committee on Economic Affairs (CCEA) has approved additional financial support to reimburse "anticipated losses" in disposal of procurement by the Cotton Corporation of India (CCI) in 2014-15. The decision would help in price support operations of 11 million bales (a bale is 170 kg) in the current 2014-15 cotton season.
It also allowed the Maharashtra State Co-operative Cotton Growers Marketing Federation to procure as a sub-agent of CCI. The cotton MSP was fixed at Rs 3,750 a qtl for medium staple and Rs 4,050 a qtl for the long staple variety.
NDRF
The Cabinet cleared converting two battalions of the Sashastra Seema Bal (SSB), comprising 2,000 personnel, into those of the National Disaster Response Force (NDRF). The latter currently has 10 battalions. The two new ones would be based in Varanasi and Arunachal Pradesh.
"The objective," stated the government, "of the conversion is to provide response to the area of eastern Uttar Pradesh, Madhya Pradesh and Arunachal Pradesh during any natural or man-made disaster, and to enhance the capability of existing NDRF battalions."
Afforestation fund
The Cabinet approved a Compensatory Afforestation Fund Bill, for expeditious utilisation of funds realised for forest land diverted to non-forest purposes.
The Bill also seeks to ensure utilisation of accumulated unspent funds already available with the Compensatory Afforestation Fund Management and Planning Authority.
Pensions
The Cabinet gave approval to continue the Rs 1,000 per month minimum pension scheme in perpetuity for Employees Provident Fund Organisation subscribers. EPFO had suspended the scheme from April 1.
JNNURM
CCEA also approved a two-year extension to some projects running under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). This is for projects under Basic Services to the Urban Poor and the Integrated Housing and Slum Development Programme.
The extension is for projects sanctioned till March 2012 under JNNURM and is expected to ensure completion of 360,000 dwelling units for urban poor, including slum-dwellers, now at various stages of completion.
An amount of Rs 350 crore would have to be released to various states by the Centre.
