While non-food credit and credit to the priority sector contracted in the financial year so far, the food credit skyrocketed by 72.5 per cent in the same duration.
Under Prime Minister Narendra Modi’s food security welfare scheme – PM Garib Kalyan Anna Yojana – the Food Corporation of India (FCI) has procured a record amount of food grains from farmers, substantially raising the food credit given by commercial banks. While non-food credit and credit to the priority sector contracted in the financial year so far, the food credit skyrocketed by 72.5 per cent in the same duration, according to RBI’s August bulletin. In the week ending May 22, the food credit was Rs 79,135 crore, which rose to Rs 88,990 crore in less than a month.
What is food credit?
Food credit is the loan provided by banks to the FCI and state government agencies for procurement of food grains from farmers, which are repaid after the central government releases food subsidy. It is hence perceived to be a zero risk lending by banks. The loan is utilised by the FCI in implementing the country’s food policy for support operations, procurement, storage, preservation, inter-state movement, and distribution of food grains throughout the country through the public distribution system.
Record procurement from FCI for PMGKAY
The FCI has procured 389.76 LMT wheat and 504.91 LMT rice in the just concluded crop season, according to the Ministry of Consumer Affairs, Food & Public Distribution. The government had said that extensive and detailed logistical planning has been done by the FCI to ensure that food grain stocks reach every part of the country as per the allocation over the five months of extension of PMGKAY.
About 81 crore beneficiaries are covered under the National Food Security Act (NFSA) and Antyodaya Anna Yojana (AAY) and they are being provided 5 kg of rice or wheat, free of cost under the government’s free food scheme. Meanwhile, in an effort to alleviate the pain of coronavirus-led crisis, the governmnet has assured that food grains will reach every corner of the country and no poor person will have to remain hungry.