With Rs 25,000 cr at stake, plan to unbundle FCI unnerves Punjab | chandigarh | Hindustan Times
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With Rs 25,000 cr at stake, plan to unbundle FCI unnerves Punjab

chandigarh Updated: Oct 03, 2014 17:52 IST
Gurpreet Singh Nibber
Gurpreet Singh Nibber
Hindustan Times

As the process is on for the unbundling of the Food Corporation of India (FCI) that drives the public distribution system (PDS), Punjab has at stake Rs 25,000 crore it is yet to recover from the national agency.

Bharatiya Janata Party parliamentarian Shanta Kumar, who leads the unbundling and restructuring committee, has hinted that the corporation with an annual outlay of Rs 2-lakh crore could be split into four companies to separate procurement, transportation, storage, and distribution. “Who will then clear our pending payment for these functions,” a senior officer in the state food and civil supplies department raised the question on Thursday.

The Shanta Kumar committee is expected to submit report in three months, and that is expected to give the FCI a new look by the beginning of the next kharif season. Formed in 1965, the FCI manages the procurement of food grains and the distribution of these to the state governments for the food security programmes. It handles about 600-lakh-tonne wheat and paddy in a year, of which a fourth is procured from Punjab.

The other main procurements centres are Haryana, Uttar Pradesh Madhya Pradesh, Andhra Pradesh. and Rajasthan. “The beginning of the Food Security Act regime requires us to cover a huge population of 84 crore, which the FCI in its present structure can’t do,” said Shanta Kumar. “Restructuring is going to be a complicated matter and the views of all stakeholders have to be taken, but we will clear the entire pending payment to the states,” the Kangra (Himachal Pradesh) MP added.

“Since the year 2003-04, our recoveries from the FCI are piling up on account of transport of food grains, storage, and interest on the government limit, and reminders have failed to generate any response,” said the civil supplies department official.

“If the FCI is divided into four, it’ll be difficult for the state to deal with the different corporations from finance and operation points of view,” says a note prepared by the Punjab food department. It adds that the FCI functioning is restricted already, as 90% of the procurement is done by the states and the cost realised in parts over the year; besides, the states also handle storage and public distribution largely.

“The process of procuring food stock and handing it over to the FCI takes an entire year, and in the process, a huge stock is damaged on account of improper storage, and the state incurs loss. We hope the restructured FCI deals with the issue,” said a Punjab official.