Govt releases Rs 25,800-crore food subsidy to FCI

The govt has earmarked Rs 1,34,835 crore as food subsidy for 2016-17

The Centre has released Rs 25,834 crore as food subsidy to the Food Corporation of India (FCI), which will help in smooth procurement and distribution of grains, the food ministry said on Tuesday.

The government has earmarked Rs 1,34,835 crore as food subsidy for 2016-17. FCI faced a subsidy arrear of Rs 58,650 crore till March 2016.

In addition, the government will shortly release a wage and means advance of Rs 10,000 crore to FCI. The Corporation is also raising short-term loans up to Rs 30,000 crore from banks. Recourse to these loans will be made by FCI as and when required, it said.
 

Thanks to these funds, there will be sufficient resources to manage winter procurement, which has just started, the food ministry added.

In the past financial year, the government had initially allocated Rs 97,000 crore to FCI, which was later increased to Rs 1.12 lakh crore at the revised estimate stage. This helped bring down subsidy arrear to Rs 58,650 crore till March.

To further bring down the subsidy arrear this year, the government might consider additional food subsidy over and above the budgetary provision.

The bulk of the food subsidy is paid to FCI to buy foodgrain at the support price and running the public distribution system.