The Food Corporation of India, chairman and managing director, Siraj Hussain said state-level procuring agencies can help in arranging sufficient credit facilities for carrying out grain purchase activities without depending on the Central government.
At present these states can hardly take up any procurement activities in the absence of the nodal agency as they depend entirely on the supplies from FCI for allocating grain under the targeted public distribution system (TPDS), Hussain told FE.
He also said that Madhya Pradesh and Chhattisgarh can increase their grain purchase through creation of state agencies by taking bank credit to finance their activities.
Besides the traditional procuring states such as Punjab, Haryana and Andhra Pradesh, many states such as Madhya Pradesh, Chhattisgarh and Odisha have substantially enhanced their procurement capacities during last few years, Hussain noted.
Madhya Pradesh and Chhatisgarh have taken R8,000 crore and R6000 crore respectively as bank credit for financing their procurement activities during current fiscal.
At the same time, West Bengal and Gujarat have taken a bank credit of R155 crore and R100 crore respectively. Uttar Pradesh and Bihar have made a provision for grain procurement from their own budget.
Through decentralised procurement, the state government agencies purchase grain through bank credit for meeting the requirement of TPDS which is subsequently reimbursed by the Central government.
On meeting the expected rise in grain demand following the implementation of proposed National Food Security law, Hussain said non-traditional states such as Bihar, Uttar Pradesh, West Bengal, Gujarat and Rajasthan must take the lead.
FCI has storage capacities of more than 63 million tonne including 17.26 million tonne of covered and plinth (CAP). The National Food Security Bill 2011 envisages providing legal entitlement over subsidised grains to 63.5% of the countrys population. The Bill which was introduced in Parliament in December last year, has been referred to the standing committee.
At present, the government supplies 35 kg rice and wheat each every month at subsidised rates to 6.52 crore BPL families under TPDS.