Food corporation of India receives 25000 Cr for smooth operations

FCI (Food Corporation of India) has received another lot of subsidy of Rs 25,000 crore from the finance ministry for the second time in a quarter this fiscal, a month earlier than the timing planned.

Food corporation of India

(Source – Food Corporation of India)

According to a senior official with the department of public distribution, it was done to make FCI operations smooth. The body has been facing financial crunch due to an overburden of expenses for implementing the food safety legislation.

Financial burden

Another official, privy to the development, revealed, “The subsidy is given in every quarter and the next lot was to come in July but due to financial burden and outstanding, the FCI was unable to manage its bills.”

The official added that earlier it was decided to borrow loan to manage the shortfall in the food subsidy on NFS Act. The outstanding dues are around Rs 60,000 crore.

Earlier, in April this year, the government released Rs 25,834 crore to FCI as food subsidy. In addition to this, wage and means advance of Rs 10,000 crore was also released. Further to this amount the FCI was also raising short-term loans from banks of around Rs 30,000 crore.

It was stated by the department of public distribution that taken together these funds would serve as sufficient resources to manage the Rabi procurement, wherein the FCI was aiming to procure around 300 lakh tonne of wheat. However, within three months time, the monetary resources were exhausted and FCI required more funds.

Earlier, in 2015-16, original food subsidy allocation was Rs 97,000 crore which was increased to Rs 1,12,000 crore at revised estimate stage. This helped to bring down the arrears of subsidy to Rs 58,650 crore. During 2016-17 also the government may consider additional food subsidy over and above budgetary provision, if required, towards the end of financial year to further bring down the subsidy arrears, according to an official statement by the department. The overall subsidy may cross Rs 1.25 lakh crore.

Rs 2/kg wheat, Rs 3/kg rice

Meanwhile, food minister Ram Vilas Paswan recently stated that the Act would cover all the 36 states and Union territories wherein households would get Rs 2/kg wheat and Rs 3/kg rice. Under the Act, the Central government also decided to share 50% (75% in the case of hilly and difficult areas) of the cost of handling & transportation of food grains incurred by the states and the dealers’ margin so that it is not passed on to the beneficiaries and they get coarse grains Rs 1/kg, wheat at Rs 2/kg and rice at Rs 3/kg.

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Source: fnbNews

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