No plans to dismantle FCI into several cos: govt

The government today said it did not plan to dismantle Food Corporation of India (FCI) into several companies as it would affect the foodgrains supply through ration shops.

FCI is the Centre's nodal agency for procurement and distribution foodgrains.

"No... The government does not propose to dismantle FCI into several companies," Food Minister KV Thomas said in a written reply to the Lok Sabha.

The various operations of FCI like procurement, storage and transportation of foodgrains need an integrated, centralised strategy as these functions are inter-related and inter-dependent, he said.

"Dismantling FCI into several companies will disrupt operational efficiencies and result in un-coordinated foodgrains management affecting the Public Distribution System (PDS)," Thomas noted.

However, for operational and administrative convenience at the field level, FCI already has five geographical zones, he added.

The minister also said that the government had engaged the consulting firm McKinsey & Co to undertake a study on FCI, with a view to enhance its efficiency.

Thomas said that McKinsey has recommended financial restructuring of FCI through multi-tiered debt structure to reduce the interest burden.

It also suggested consolidation of handling and transport contracts, changes in use and sourcing pattern of gunny bags and network optimisation among other things.

It also recommended setting up vigilance administration and performance review through defined parameters and fixation of accountability, the minister added.