Lok Sabha Question No. 3666 (UNSTARRED), answered on 2021-08-10
Subject: Private Entrpreneurs Guarantee Scheme of FCI
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: Dhanush M Kumar, Gautham Sigamani Pon, Anurag Sharma, C.N. Annadurai, Ganesan Selvam

## GOVERNMENT OF INDIA

## MtNISTRY  OF CONSUMER  AFFAIRS, FOOD &  puBl.tc  DtsTRtBUTtON DEPARTMENT OF FOOD AND PUELIG DISTRIBUTION

## LOK SABHA UNSTARRED QUESTION ilO. 3666 TO BE ANSWERED  Ot{ {orH AUGUST,  2O2'

## PRIVATE ENTRPREI{EURS  GUARANTEE SCHEME OF FGI

3666. SHRI DHAiIU$H M. KUMAR:

SHRI GAUTHAM  SIGAMAiII POil:

SHRI ANURAG SHARMA:

SHRI G.N. ANNADURAT:

SHRI SELVAM G.:

Wilt the Miqister  of  GONSUMER  AFFAIRS,  FOOD AND  pUBLIc DISTR,BUT.ON  ,ccffir enrd, ur<-a  ct{ grffi6 hT{Er t'*  rc  pteasea  to state:

- (a)  the aims and objectives  and sarient features of  private  Entrepreneurc Guarantee  (PEG)  $cheme implemented  by Food CorpoEtion  of lnaia  lfCl;;
- (b)  the total storage capacity  created under Private Entrepreneurs Guarantee (PEG) Scheme during each of the last Maharashtra, Tamil Nadu and Uttar  pradesh,  distri three years  especialty in ct-wise;
- (c) whether the Government has a[ocated adequate funds for creating additiona!/Modern  Storage Gapacity under the said scheme,  if so, the details thereof during the rast three years, year-wise  amd state-wise;
- (d) the detairs of the achievements  of the scheme since its inception;
- (e) whether  the Government proposes  to cover every state under the said scheme so as to increase  the storage  capacity  of foodgrains, if son the details thereof;
- (o the details  of the overal storage  capacity  required  for centrar pool food grains  in the country, during normal procurement  seasonl and
- (g) whether the Government has taken steps for augmenting  the storage capacity in  PPP mode, to  take  care  of  increasing  levels of production/procurement  of foodgrains,  if so, the details  thereofil

## ANSWER

MINISTER OF STATE FOR IUIINISTRY  OF RURAL DEVELOPMEilT  AilD coilsuMER  AFFA|RS, FOOD &  puBLtC  DtsTRtBUTtON

(sADHVt  NTRANJAN  -rYOTt)

(a): Government  of lndia ha3 formutated private  Entrepreneurs Guarantee (PEG) scheme for construction of storage capacity through private  entrepreneurs,  Gentrat  warehousing Gorporation  (GWG), state warehousing  Gorporations  (swcs) and other state Agencies  on guaianteed hiring for lo years in case of private  investorc and 9 years in case of GWG, swGs and other state agencies. The satient features of  pEG  scheme are at Annexure l.

(b): Total Storage  capacity created  under  pEG  Scheme during each of the last three years  is given below:

/

Fig. in LMT

|   2018-19 |   2A19-20 | 20.20-21   |
|-----------|-----------|------------|
|       1.4 |      1.47 | o.55       |

District'wise  storage capacity constructed under  pEG  $cheme in Uttar Pradesh durang each of the last three years is given betow:

Fig. in LMT

| District   | 201A19   | 2019-20   | 2020-21   |
|------------|----------|-----------|-----------|
| Bhadhohi   | 3,340    | 1 660     |           |
| Sonbhadra  | 17 500   |           |           |
| Mainpuri   | {o,ooo   | 15,O0O    |           |
| s. K. af   | 5,0oo    | 5 o00     |           |
| Bareily    |          |           | 5,OO0     |

l{o storage  capacity was created in last three years in the states of Maharashtra  and ramir Nadu. However,  totar capacity created under the Scheme in these two States is 5.62 and 2.55 LMT respectively.

(c): Under PEG scheme, godowns are constructed by private partaes, GWG, swGs and other state agencies  by arranging  their own funds and land. After completion  of construction  work, Food Gorporation  of lndia (FCI) takes over the godowns on guaranteed  hiring basis.

(d): Totat storage capacity created under  pEG  scheme since its inception upto 30.06.2o2{ is 144.19 LMT. state-wise detaits of eapacaty created under PEG Scheme upto 3O.O6.2O21  is al Annexure-lt.

........3/.

- (e): Yes Sir, storage capacity under PEG Scheme has been created in all the States except Delh-, I{agaland,  Arunachal Pradesh, Manipur, Mizoram, Tripura and Sikkim. FG! has sufficient owned capacity in Delhi. !n North Eastern States mentioned  above, storage  godowns  are constructed  by FGI under Gentral Sector scheme. Further, FGt has sanctioned  storage capacity of {5,0OO MT under PEG scheme in the state of Meghataya. Details are at Annexure-ll.
- (O:  Storage capa6ity of FGI depends upon the level of procurement, requirement of  buffer norms and Public Distribution  System (pDS) operations. Storage gap is assessed in the procuring States based on the highest stock levels in the last three years and in the consuming  States on the basis of 4 months (6 months in case of NE regions) requirement  of National Food Security Act (NFSA) and Other Wetfare Schemes (OWS),

FGI is augmenting  its storage capacity through following schemes :-

- l.  Private Entrepreneurs  Guarantee (PEG) Scheme
2. 2, Gentral  Sector  Scheme.
3. Gonstruction  of Silos under PPP mode
4. Hiring of godown from GWGs/SWGs/State  Agencies
5. Private Warehousing Scheme  (PIVS)

As on 3O.O6.2O2{, Storage capacity available  with FGI and State agencies for storage of central pool foodgrain  stock is 9{6.65 Lakh MT (Govered  -  723.44 LMT and CAP  -  {93.2{ LMT) against the stock hotding  of 900.45 Lakh MT.

- (S): Yes Sir, FCI is augmenting its storage capacity through following schemes in Public-private partnership  (PPP) mode F
- {. Private Entrepreneurs  Guarantee (PEG) Scheme
2. Gonstruction  of Silos

*****

## AilNEXURE REFERRED TO IN REPLY TO PART (a) OF THE UNSTARRED QUESTION NO.3Gi66 FOR ANSWER  ON IO.O8.2O2{ IN THE LOK SABHA.

## HIGHLIGHTS OF

## HEME FOR CONSTRUCTION,  OF DOWNS FOR FCI

## THRO

## (PE G  \_  2OO8)  \_  AS AMENDED IN Auzust 2010

1. Circulated  by Gort. of India on 28.07.2008  & amended  vide notification  dated 25.01.2010. Further, amenderd to l0 year guarantee  scheme  by GOI vide letter dated 05.08.2010.
2. Competent Committees  :
- a. State Level Committee (SLC) headed  by ED(Zone), FCI (For recommendation) include State  (Food) Secretary  besides the state nominees of FCI, SWC,  CWC & Railways.
- b. High Level  .Committee  (HLC) headed by CMD, FCI (For approval) include nominees from different Ministries of GOI besides Executive Directors  dealing with storage  / transportaticn  / procurement / distribution and finance.
3. Criteria for additional storage proposals  after considering capacities  available  within a radius  ol 100 Krns.:
- a) In consuming  states: Based  on 4 months  PDS and OWS requirement.
- b) In procurement  states:  Highest stock  of last three years.
- c) Such requirement will be considered  at 80% utilization  of capacities.
4. Salient features  ofGodowns  to be constructed:
- i) No godown  for less than 5000 MIs in plain areas  and less than 1670 MTs in hilly areas
11. iD All godowns of 5000 MTs & above capacity should be preferably within 8 kms. of full rake capacity railway goods  shed / procuring  mandi.
12. iiD All 25000  MTs and above capacity  godowns  should  be preferably railway siding godowns.
13. iv) The private  investor / entrepreneur will be allowed to develop  additional  storage capacity in the same premises for storage of other agricultural  facilities for cold storage,  food processing  etc. to optimize  asset  utilisation so long as it does not adversel)i  affect  storage and operations  of SWC  / CWC / state agency,
- v) The priv:rte  investol will build godown  as per FCI specifications  and may  provide services  .[ike  security,  preservation of stock etc.
15. vi) All  godowns should be on national / state highways.

## 1

............2/-

## 5. ImplementingAgency:

- i) Capaciry to be created by CWC  & SWCs.
2. iD If cwc & SWC do not agree to undertake  construction  of godown,  any other state agency  having procurement  and warehousing experience can construct godowns.
3. iii) If cwc / swc / Stale Agency  do not aSree to act as a nodal agency,  FCI  w l go in for tendering und er 7 / l0 year guarantee  scheme.

## 6. Guarantee Period :

- D FCI will provide  guarantee  to hire the godowns  for 7/10 years  that may be extended  after ten year guarantee period  on the basis of utiltation and storage capacity demand.
- ii) out ofthe capacities approved,  cwc and SWCs can construct  godowns under 6/9 years guarantee  scheme ot the locations where  they possess  the lind.

## 7. Ceiling of Rates :

- i) Either  equal  or less than Ih9 civc indexed  rate (upto  Sept.  2009) of Rs.4.78 per qtl.  per  month  (latest rate is for 2010-11, which is ni. S.f+TqUmonttr).
2. ii) There is no cap on this maximum  indexed  rate for acceptance.
3. iiD HLC is given power to accept higher rates  after recording  the reasons in writing,  on case to case basis.

## 8. Construction  of Godown:

- i) The par6,  finalised after the tender  process  will get 15 days  to sign the agreement. Construcriion  has to be completed as follows  :
- Two years

Godowns with Railway  siding

- Godowns without Raihvay  siding - One year
- The delay  in construction  of maximum  up to one year may be allor.ved  with a clause  of similar reduction in the guarantee  period.  In case of delay beyond  one year the agreement  will stand cancelled. iD
- FCI will have freedom to choose a date of taking  over the godown  within 6 months ofthe cornpletion ofthe  godown  and the guarantee  period  will start from the date oftaking over the godown. iiD

?l-

## HIGHLIGHTS  OF SCHEME FOR CONSTRUCTION  OF GODOWNS FOR DCP STATES STORAGE  REQUIREMENTS  THROUGH  PRIVATE  ENTREPRENEURS -  2OO9

(PEG \_  2009)

- l. Circulated  by Gort. oflndia on 08.04.2010.
2. Competent Committees  :
- a. \_SPt. !.19! 9olmittee (SLC)  headed  by Secretary (Food)  of the State including  ED (Zone),  FCI besides the state nominees  from finance'department  of Govt., FCI, C:WC, SWC and Railways.
4. b High Level Committee  (HLC) headed by CMD, FCI (For approval) include  nominees from Minislry of CAF&pD, GOI, FCI, CWC, Railway Soaxd beiiaes the nominees from the State Govt. & SWC.
3. (a) Criteria  to examine the storage needs  ofthe State : "The quantity  equivalent  to 14 months  allocation under  TpDS and  owS will be retained  by the State Go\t. and balance quantity  will be taken over by F61,,--
6. (b) Assessment  of Storage capacity:
7. (i) For each month  in the year,  the sum of average  stock of wheat and rice in a rnonth in the last three years will be calculated.
8. (ii) The highest of the sum of average stock of wheat and rice will be considered  as the storage  capacity required  if it is less than  14 months requirement  under TpDS and other  welfare  schemes.  Ifthis is excess  ofthe state's 14 months' requirement under TpDS and other werfare schemes, such excess stocks  w l be taken over by FCI and suitabre storage capacity will be created  by FCI for management  of these  stocks. Ifsum of averagl stock is less than requirement  of 4 months TpDS and other welfare schemes, then the requirement  of4 months would be considered.
9. (iiD At the Micro lever, the requirement  of storage  capacity  will be assessed  in the follorving  manner:
10. (a.)  In plain areas, the existing storage  capacity  within 100 kms. available  with FCVCWC/SWC  and other Staie Agencies  will be taken into account.
11. (b) In hilly areas,  the existing  storage  capacity  within 50 kms available with FCI/CWC/SWC, other State Agencies rvill be taken into account.
4. Salient  features  of Godowns to be constructed :
13. (i) No godown for Iess than 5000 IvITs in plain areas and less than 1670 MTs in hilly areas.
14. (ii) All godowns of 5000 MTs & above capacity should be preferabry  within  g kms. of full rake capacity railway goods  shed / procuring  mandi.

it-

(.

- (iiD All 25000 MTs and above capacity godowns should be preferably  with railway sidings.
- (iv) The private investor  / entrepreneur  will be allowed  to develop additional storage capacity  in the same premises  for storage  of other agricultural facilities for cold storage,\_food  processing  etc. to optimize asset utilisation  so rong  as it does not adversely afEect storage and opemtions of SWC / state agency.
- (v) The private investor  will build godown  as per FCI specifications  and may provide services  like security, preservation of stock etc.
- (vi) All godowns  should be on national / state highways.

## 5. ImplementingAgency:

- (i) capacirv-  to be created  by SWC / any other state Govt. agency  ensaged  in business of procurement  and warehousing.
- (ii) Where no agency, then FCI.
6. Guarantee Period :

7/10 years  for creation ofnew storing facilities only.

## 7. Ceiling of Rates :

- i) Either equal or less than the CWC indexed  rate (up to Sept. 2009) of Rs.4.7g per qtl. per month  (latest  rate is for 2010-11. which is Rs. 5.g4lqtVmonth).
2. (D There is no cap on this maximum indexed  rate for acceptance.
3. (ii) HLC is given power to accept higher rates  after recording  the reasons in writing,  on case to case basis.

## 8. Construction  of Godown  :

- (i) The party finalised  after the tender process  will get 15 days  to sign the agreement  & further maximum one year in case of non-railway  siding  godown & two years for railway  siding godown  for completion  ofthe project.
- (iD The delay in construction  of maximum up to one year  may be allowed with a clause of similar reduction in the guarantee  period. kr case of delay beyond one yr:ar the agreement  will stand cancelled.
- In case  of delal.in  construction  of maximum up to one year, SWC/State Golt. Agency will have freedom to choose a date of taking over the godown  within 6 months of the completion  of the godorvn  and the guarantee period  will start from the date oftaking  over the godown. (iii)

## ANNEXURE REFERRED TO tN REpLy TO PARTS (d)&(e) OF THE UilATARRED OUESTION 110.3666  FOR ANSWER ON {O.O8.2O2{ IN THE LOK SABHA.

## State-wise  details ofcapacity  created under  pEG  Scheme upto 30.06.2021

(Fig.  Mr)

| SI. No.   | State             | Capacity sanctioned/ allotted   | Capacity completed   |
|-----------|-------------------|---------------------------------|----------------------|
| I         | Andhra Pradesh    | I 12,800                        | 87,800               |
| 2         | Bihar             | 446,180                         | 355,000              |
| 3         | Chhattisgarh      | 537 0                           | 537,230              |
| 4         | Gujarat           | 49,800                          | 49,800               |
| 5         | Haryana           | 3,501,589                       | 3,469,289            |
| 6         | Himachal Pradr:sh | I 15,870                        | 54,180               |
| 7         | Jammu & Kashmir   | 275,520                         | 179,690              |
| 8         | Jharkhand         | 366,000                         | 278,000              |
| 9         | Karnataka         | 241,440                         | 241 440              |
| l0        | Kerala            | 5,000                           | s,000                |
| ll        | Madhya Pradesh    | 1,379,660                       | 1,303,160            |
| t2        | Maharashtra       | 562,81 l                        | 5 8ll                |
| l3        | Odisha            | 360,000                         | 357 500              |
| 14        | Punjab            | 4 468,836                       | 4,468,836            |
| l5        | Raj asthan        | 235,000                         | 235,000              |
| 16        | Tamilnadu         | 265,000                         | 25 s,000             |
| 't7       | Telengana         | 319,000                         | 299,000              |
| l8        | Uttar Pradesh     | 1,8lL,127                       | 1,491,t27            |
| 19        | Uttarakhand       | 10,000                          | 10,000               |
| 20        | West Bengal       | 184,090                         | 154,090              |
| 2t        | Assam             | 25,000                          | 25,000               |
| 22        | Meghalaya         | 1s,000                          | 0                    |
|           | Grand Total       | ,15,286,953                     | 14,4181953           |