Lok Sabha Question No. 642 (UNSTARRED), answered on 2017-12-19
Subject: Salient Features of PEG Scheme
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: RITI PATHAK

## GOVERNMENT OF INDIA

## MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION

## LOK SABHA UNSTARRED QUESTION NO. 642

## TO BE ANSWERED ON 19 TH  DECEMBER, 2017

## SALIENT FEATURES OF PEG SCHEME

## 642. SHRIMATI RITI PATHAK:

Will the Minister of CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state:

- (a) the  salient  features  of  the  Private  Entrepreneurs  Guarantee  (PEG) Scheme implemented by the Government in the country;
- (b) whether the Government has allotted sufficient funds for the creation of  modern storage capacity in the  country under the above scheme during the last three years and the current year;
- (c) if so, the details thereof and if not, the reasons therefor, State-wise;
- (d) whether  the  Government  proposes  to  cover  all  the  States  in  the country  under  the  aforesaid  scheme  so  that  the  existing  modern  storage capacity of foodgrains in the country could be increased and if so, the details thereof along with the current status of such proposal; and
- (e) the other steps taken/being taken by the Government to ensure safe storage of foodgrains across the country?

## A N S W E R

MINISTER OF STATE FOR  CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION (SHRI C. R. CHAUDHARY)

- (a):        In  order  to  augment  the  storage  capacity  in  the  country  the Government  formulated  Private  Entrepreneurs  Guarantee  (PEG)  Scheme  in the  year  2008  &  2009  for  construction  of  storage  capacity  through  private entrepreneurs, Central Warehousing Corporation (CWC) and State Warehousing Corporations (SWCs). The salient features of PEG scheme are as given below:

-  Investment and construction is done by the private investor/State Agencies. As return for investment, Food Corporation of India (FCI) guarantees hiring of the  godown  constructed  by  a  private  party  for  10  years.    The  guarantee period for CWC/SWCs is 9 years.
-  The  location  and  capacity  for  godowns  are  identified  as  per  storage requirements by State Level Committees (SLC) and finally approved by the High Level Committee (HLC) headed by Chairman & Managing Director, FCI.
-  Minimum capacity for a godown is 5,000 MT in plain areas and 1,670 MT in hilly areas.  Godowns of 5,000 MT and above capacity should be preferably within  8  KMs  of  full  rake  capacity  railway  goods  shed/procuring  mandi. Godowns of 25,000 MT and above capacity should be preferably with Railway sidings.  All godowns should be near National/State highways.
-  The godown must be constructed as per the specifications stipulated by FCI. In  addition  to  construction,  the  partner  may  also  provide  services  like security and preservation if required by FCI.
-  The period of construction normally allowed is one year for godowns without railway  siding  and  two  years  for  godowns  with  railway  siding.  Delay  in construction  upto  one  may  be  allowed  with similar reduction in the guarantee period and in case of delay beyond one year the agreement may be cancelled.
-  Selection of the private party is done through open advertisement and two stage  tendering  process.    The  private  party  may  be  an  individual  or partnership  firm  or  a  company  or  trust,  having  ownership  of  land  in  the location where godown is to be constructed.
-  A  person  holding  land  under  Registered  Lease  for  a  minimum  period  of  13 years with permission to construct godown can also apply.
-  A party, who does not own land, but intends to acquire the same within 120 days  from  the  date  of  acceptance  letter,  can  apply  by  furnishing  an additional  amount  of  Earnest  Money  Deposit  (EMD)  and  a  Supplementary Bank Guarantee @ Rs. 100.00 per MT.
- (b)  &  (c):    Under  PEG  scheme,  investment  for  construction  of  godowns  is done by private parties, CWC, SWCs and other State agencies by arranging their  own  funds  and  land.  No  funds  are  allocated  by  the  Government  for construction of godowns.

- (d):   The PEG scheme is already implemented throughout the country as per assessment of requirement, except the North Eastern States where godowns are constructed by using Government funds under Central Sector Scheme.
- (e):    The Bureau of Indian Standards (BIS), Food Corporation of India (FCI) & Central Warehousing Corporation (CWC) have prescribed standard specifications  for  construction  of  foodgrain  storage  godowns.  While  taking up construction, the central agencies namely FCI & CWC and State Agencies follow the prescribed construction design for godowns in order to ensure that the  foodgrains  are  protected  from  natural  calamities  like  rains  and  floods. Similarly,  only  scientifically  constructed  godowns  are  hired  from  private parties.  In  addition,  FCI  takes  the  following  steps  to  avoid  damage  to foodgrains:
- Foodgrains are stored in scientifically constructed godowns. Some foodgrains  are  stored  for  short  periods  in  CAP  (cover  and  plinth)  in  peak procurement season.
- Adequate dunnage materials such as wooden crates, bamboo  mats, polythene sheets are used to check migration of moisture from the floor to the foodgrains.
- Prophylactic (spraying of insecticides) and curative treatments (fumigation) are  carried  out  regularly  and  fumigation  covers,  nylon  ropes,  nets  etc  are provided for control of insects & pests in all the godowns.
- Regular  periodic  inspections  of  the  stocks/godowns  are  undertaken  by qualified and trained staff and officers.
- The principle of 'First in First Out' (FIFO) is followed to the extent possible so as to avoid longer storage of foodgrains in godowns.
- Only covered rail wagons are used for movement of foodgrains so as to avoid damage during transit.
- Damage Monitoring Cells have been set up at District,  Regional  and Zonal levels to regularly monitor quality of stocks and reduce damages.

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