The fund will be used as working capital in the financial year 2024-25 by Food Corporation of India (FCI).
- The decision is aimed at bolstering the agricultural sector and ensuring the welfare of farmers nationwide.
Financing of FCI operations
- FCI purchases the food grains for the Central Pool at the procurement prices ( known as Minimum Support Price) and issues the same at the Central Issue Prices fixed by the Government of India.
- The issue prices do not cover the full economic cost incurred by the Corporation in the procurement,movement, storage and distribution of food grains.
- The difference represents the consumer subsidy for the Public Distribution System, and is paid to the Corporation by the Government of India.
Challenges with FCI: Low share in direct procurement (less than 5%), FCI-owned facilities remain under-utilised, Leakages in godowns, procurement of poor quality stocks and transit loss, etc.
Recommendations given by standing committee to improve FCI functioning
- It can assist the state governments in creating adequate infrastructure for effective procurement.
- Adoption of adequate scientific storage measures to prevent any damage.
- Strengthen its vigilance mechanism in coordination with states.
About Food Corporation of India
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