Food Corporation gets Rs 13,000 cr as food subsidy from govt

To ensure smooth procurement and distribution of grains, the government has released Rs 13,000 crore as food subsidy to state-owned Food Corporation of India (FCI).

The corporation is facing a subsidy arrear of above Rs 55,000 crore as of March 31, 2015.

For 2015-16, the government has allocated Rs 97,000 crore as food subsidy to FCI against an estimated bill of Rs 1,18,000 crore.

In 2014-15, the government had allocated Rs 92,000 crore as food subsidy, out of which Rs 91,995.35 crore was given to FCI. The subsidy incurred in the year was Rs 1,02,476 crore.

"The government has released Rs 13,000 crore as food subsidy to FCI, this is the fourth instalment of subsidy released to the corporation. So far, the government has paid Rs 46,250 crore as subsidy to FCI," a source told PTI.

The bulk of the food subsidy is paid to FCI for running the public distribution system (PDS).

Besides, FCI also has a cash credit limit of Rs 54,495 crore with a consortium of 67 banks at a rate of 10.51 per cent. In addition to this, the corporation can also raise short-term loan of up to Rs 30,000 crore by inviting tenders from banks.

The corporation has already utilised its cash credit limit and raised its short-term loan, the source added.

In last few years, FCI's operation costs have risen sharply due to increase in the minimum support prices (MSP) of grains as well as high storage costs.

FCI is the nodal agency for procurement and distribution of foodgrains in the country.