You are here: Home » Economy & Policy » News
Business Standard

FCI revamp panel suggests cash transfer of food subsidy

Modi wants quick comments by FoodMin; cash transfer of food subsidy recommended in 52 cities, plus build-up of operations infra in east India

BS Reporter & Agencies  |  New Delhi 

A committee asked to study how to reform the Food Corporation of India (FCI) gave its report to Prime Minister Narendra Modi on Wednesday.

It is believed to have recommended that food subsidies be transferred in cash for the 52 cities having a population of more than a million, over the next two years.

The panel was chaired by Shanta Kumar, a two-time chief minister of Himachal Pradesh and a former Union food minister.

“The prime minister has asked the department of food and public distribution to expeditiously give its comments on the report, so that it can then be implemented in a time-bound manner,” went an official statement.

Officials said Ashok Gulati, former chairman of the Commission on Agricultural Costs and Prices, also a member of this panel, gave a presentation on Wednesday regarding the various recommendations. Food Minister Ram Vilas Paswan was present.

FCI is the nodal agency for procurement of foodgrain and its distribution through the Public Distribution System. Its chairman and managing director, C Viswanath, was part of the committee.

Officials said the panel had also recommended that the major foodgrain growing states of Punjab, Haryana and Andhra Pradesh become decentralised procurement ones, taking over the job of purchases from the Corporation. FCI should, it has reportedly said, focus on the eastern states, where it has a limited role as of now, due to lack of an appropriate structure.

The previous government had explored the idea of providing the food subsidy in cash and planned an experimental project in 2012 for six months in the Union Territories of Delhi, Andaman & Nicobar Islands, Chandigarh, Dadra & Nagar Haveli, Daman & Diu and Lakshawadeep. However, this was discontinued after a while, for lack of political backing.

The eight-member committee was set up in August 2014. It was asked to suggest a model for restructuring FCI, to improve its operational efficiency and financial management. And, suggest measures for overall improvement in management of foodgrain by FCI, the nodal agency for procurement and distribution of foodgrains through PDS.

The committee was initially asked to give its recommendations in three months. It later sought and got a five-month extension.

Other members of the committee were Ram Sewak Sharma, the government’s secretary, electronics and information technology; the chief secretaries of the governments of Punjab and Chhattisgarh; academicians G Raghuram and G Nancharaiah from the Indian Institute of Management, Ahmedabad, and Hyderabad University, respectively.

First Published: Thu, January 22 2015. 00:36 IST