Centre owes ₹61,000 crore to FCI as food subsidy

The Centre owes ₹61,000 crore as food subsidy to government-owned Food Corporation of India following lower Budget allocation, compelling it to raise a short-term loan of ₹70, 820 crore in 2015-16. This was about 20 per cent higher than ₹59,415 crore raised in 2014-15. In 2013-14, it had raised ₹35,510 crore as short-term loan.

“The outstanding arrear of food subsidy in case of FCI, as on March 31, 2016 was about ₹61,000 crore,” Food Minister Ram Vilas Paswan informed the Lok Sabha in a written reply on Tuesday. He said this was due to the lower Budget allocation of about ₹1,03,300 crore for food subsidy in 2016-17, against the demand of ₹1,29,000 crore.

In another written reply, Paswan said FCI proposed to “slowly withdraw itself” from foodgrain procurement and hand it over to “experienced” States, such as Punjab and Haryana, adding that its “withdrawal shall be based on the consent of State governments.”

Citing an example, he said FCI had not participated in wheat procurement in Haryana during Rabi marketing season 2015-16, but participated on the State’s request in Rabi marketing season 2016-17. On the request of the Punjab government, FCI participated in wheat and paddy procurement during Rabi and Kharif marketing season 2015-16, he added.

In Uttar Pradesh, West Bengal and Jharkhand, FCI had engaged private parties for procurement operations.

FCI, which was established under the Food Corporation Act, 1964, to implement the food policies of the Indian government, has also set up a panel of three executive directors to prepare a roadmap for “building a new face.”

Meanwhile, FCI has finalised the tender process to set up silos for a total capacity of 2.5 lakh tonnes at six locations under viability gap funding mode. The letter of award has been issued to selected bidders, said a Ministry statement.

The chosen bidders for the silos are Sree Karthikeya Spinning & Weaving Mills in Narela (Delhi), Changsari (Assam) and Sahnewal (Punjab), Adani Agri Logistics in Kotkapura (Punjab) and Katihar (Bihar) and Sudheekhsha Warehouse in Whitefield (Karnataka).