Amid rising food subsidy arrears, state-run Food Corporation of India (FCI) plans to raise Rs 30,000 crore as a short-term loan from banks to meet its working capital requirements.
According to sources, subsidy arrears at the start of the current fiscal stood at above Rs 50,000 crore and are estimated to cross Rs 60,000 crore by the end of this financial year.
In 2014-15, the government had allocated Rs 92,000 crore as food subsidy, out of which Rs 91,995.35 crore was given to the FCI. The actual subsidy outgo during the year was Rs 1,02,476 crore.
In the current fiscal, the government has allocated Rs 97,000 crore as subsidy to the FCI against the estimated bill of Rs 1,18,000 crore.
"So far, about Rs 92,000 crore of subsidy has already been utilised by the corporation, so to meet our working capital requirements the corporation will raise Rs 30,000 crore as a short-term loan from banks," a source told PTI.
The tender will be floated in the next few days and loan will be raised at the base rate for the period of 150 days, the source added.
FCI has a cash credit limit of Rs 54,495 crore with a consortium of 67 banks at a rate of 10.51 per cent. In addition, it can raise a short-term loan of up to Rs 30,000 crore by inviting tenders from the banks.
The bulk of the food subsidy is paid to the FCI for running the public distribution system (PDS).
The PDS operation cost has risen sharply in the past few years due to increase in the minimum support prices (MSP) of grains as well as high storage costs, the source added.
Meanwhile, the FCI had also moved a proposal to raise Rs 40,000 crore through long-term bonds from LIC to liquidate subsidy arrears due from the government.
The proposal is at present under review of the government, source added.
