Cabinet to clear FCI dues of Rs 16,000 cr

The Cabinet today approved a proposal to issue special securities for settling the outstanding dues of around Rs 16,000 crore of the Food Corporation of India.

Briefing reporters after the Cabinet meeting, Finance Minister P Chidambaram said the details of the proposal would be worked out and placed before Parliament.

The Cabinet also cleared a one-time dispensation of Rs 150 crore for the north-east states under the Sarva Siksha Abhiyan.

The dispensation, to be provided by the department of the north-east region for the years 2005-06 and 2006-07, would account for 15 per cent of the 25 per cent share of the states under the Sarva Siksha Abhiyan.

An agreement between India and South Africa on merchant shipping and other maritime transport was also cleared by the Cabinet.

The Cabinet also gave ex-posto approval to a pilot scheme for Provision of Urban amenities in rural areas.

The pilot scheme will be implemented in seven districts, one each in the states of Assam, Andhra Pradesh, Bihar, Maharashtra, Rajasthan, Uttar Pradesh and Orissa.

The Cabinet Committee on Prices also met today to review the price situation in the country.

"Overall inflation is moderate, but the prices of three commodities "" wheat, sugar and potato "" are slightly on the higher side," the finance minister said adding that while prices of wheat had moderated in the northern states, it was slightly higher in the southern states.

Chidambaram said the committee noted that with the import of 5 lakh tonnes of wheat coming to the southern states, the prices were expected to moderate in the coming weeks.

Regarding sugar, he said the food ministry was taking several measures including converting free sale sugar into levy sugar. The ministry will also monitor the sugar mills to see if the directives were being followed.

Asked if the committee discussed whether the unseasonal rains would adversely impact crops, Chidambaram said the ministry of agriculture had reported that there was unlikely to be any damage to crops.