FCI to raise Rs 15,000 crore through short-term credit

Written by Sandip Das | New Delhi | Updated: Feb 10 2014, 19:45pm hrs
With a sharp rise in outstanding dues against funds allocated under the food subsidy head, the Food Corporation of India will seek R15,000 crore as short term credit for meeting the expenses for carrying out its operations of procurement and distribution of food grains till end of current fiscal.

Food ministry sources said FCI board has approved raising R15,000 crore short term loans from the designated banks besides raising R8,000 crore through bonds which had been approved by the finance ministry.

We have also got an additional supplementary of R2,000 crore under the food subsidy budget for the current fiscal, a senior official said.

According to FCI officials, the unsettled dues from the government is expected to rise to more than R40,000 crore in the current fiscal after exhausting the budgetary allocation of R90,000 crore for 2013-14 under the food subsidy allocation. Out of food subsidy allocation, R10,000 crore was earmarked for implementation of National Food Security Act, 2013, which had been rolled out in a few states.

Holding on to huge foodgrain stocks much above requirement and increase in minimum support price provided to farmers during last few years have led to a situation where annual food subsidy allocations are not enough to meet our financial requirement, an FCI official said.