Recently, the Supreme Court has taken up a dispute between Punjab and the Centre concerning the enforceability of state legislation that raises fees for food grain procurement under central PDS schemes.
Punjab has increased the procurement levy to 6% of the Minimum Support Price (MSP) but the Centre has agreed to reimburse only 2% applicable uniformly across states. Punjab contends that it possesses the exclusive authority to determine such statutory charges on behalf of the Centre, invoking Article 131 of the Constitution due to the Centre’s refusal to reimburse the full 6% levy.
The centre counters that no legal obligation exists under parliamentary law for it to accept state-imposed levies, asserting its right to set procurement rates. The Punjab government claims that the levies are allocated solely for rural infrastructure development, while the Centre accuses Punjab of misusing reimbursed funds for unrelated governmental projects and revenue enhancement.
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