Govt allots Rs 25,834 crore food subsidy to FCI

To ensure smooth procurement and distribution of foodgrains, the government on Tuesday released Rs 25,834 crore as food subsidy to state-owned Food Corporation of India (FCI) for this fiscal.

The government has earmarked Rs 1,34,834.61 crore as food subsidy for 2016-17 fiscal. The corporation is facing a subsidy arrear of Rs 58,650 crore till March 2016.

"The government has released today Rs 25,834 crore to FCI as food subsidy," the Food Ministry said in a statement.

In addition to this, the government will shortly release a wage and means advance of Rs 10,000 crore. FCI is also raising short-term loans from banks up to a maximum limit of Rs 30,000 crore. Recourse to these loans will be made by FCI as and when required, it said.

"Taken together these funds, there will be sufficient resources to manage rabi (winter) procurement which has just started," the statement added.

In the last fiscal, the government had initially allocated Rs 97,000 crore to FCI, which was later increased to Rs 1,12,000 crore at the revised estimate stage. This helped bring down subsidy arrear to Rs 58,650 crore till March 2016.

To further bring down the subsidy arrear in this fiscal, the government said it may consider additional food subsidy over and above the budgetary provision, if required, towards the end of the current financial year.

The bulk of the food subsidy is paid to FCI for buying foodgrains at support price and running the public distribution system.