The outstanding dues from the finance ministry to Food Corporation of India (FCI) on account of food subsidy allocation had reached Rs 61,000 crore by the end of FY16, according to information provided in Parliament on Tuesday.
“Generally, there is no delay in release of food subsidy to FCI by the government. However, due to short provision of subsidy in budget, FCI had raised short-term loan to meet its working capital requirement,” food minister Ram Vilas Paswan said in Lok Sabha in a written statement.
FCI had raised Rs 70,820 crore worth of short-term loan in the last fiscal while the corporation availed Rs 59,415 crore as short term loan (around 90 days duration) in FY15.
Food ministry officials told FE that FCI is forced to avail short-term loan facility after exhausting the cash credit limit (CCL) of Rs 54,495 crore sanctioned by a consortium of 67 banks because of inadequate allocation under the food subsidy budget in the last few years.
Meanwhile, FCI has floated a tender to raise Rs 20,000 crore as short-term loan from the banks for meeting its day-to-day expenses. The first instalment of Rs 24,000 crore under food subsidy allocated to the corporation for the current fiscal released by the finance ministry recently has been already exhausted for settlement of loans under the CCL availed in last fiscal.
“In the current fiscal, against a demand of about Rs 1.29 lakh crore for food subsidy by FCI, a budget allocation of about Rs 1.03 lakh crore has been made, which undergoes revision through revised estimate or supplementary grant,” Paswan said in Parliament.
Officials said unless the large mismatch between the state-run agency’s operational expenses and the government’s food subsidy allocations is addressed, the outstandings due for FCI will rise further in the current fiscal.