Lok Sabha Question No. 465 (UNSTARRED), answered on 2025-07-23
Subject: Implementation of Reforms  in FCI
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: Shri Ramasahayam Raghuram Reddy

## MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION

## GOVERNMENT OF INDIA DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION

## LOK SABHA

UNSTARRED QUESTION NO. 465

TO BE ANSWERED ON 23RD JULY, 2025

## IMPLEMENTATION  OF REFORMS IN FCI

## 465.  SHRI RAMASAHAYAM  RAGHURAM REDDY:

Will  the Minister of  CONSUMER AFFAIRS, FOOD AND  PUBLIC DISTRIBUTION be pleased to state:

- (a) whether the Government has plans to implement reforms as  suggested by the Shanta Kumar  Committee  to  restructure  Food  Corporation of  India  to  improve its  financial management and operational efficiency  in procurement, storage and distribution  of foodgrains;
- (b) if  so, the details thereof;
- (c) if  not, the reasons therefor; and
- (d) the details of  other such measures being taken by the Government to  ensure that the functioning ofFCI is streamlined and fast-paced

## ANSWER

MINISTER OF STATE FOR MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION

(SHRIMATI NIMUBEN JAYANTIBHAI BAMBHANIYA)

(a) to (b):Yes sir.

A High Level Committee (HLC) on restructuring of Food Corporation of India (FCI), chaired by  Shri  Shanta Kumar,  conducted a  comprehensive review  of  the  administrative, functional and financial  structure ofFCI and submitted its report.

The action taken on  its  recommendations related to  improving FCI's  financial management and operational  efficiency  in procurement,  storage and distribution of food  grains are at Annexure-A.

- (c) N/A.
- (d) The details are enclosed at Annexure-A.

####

## (Annexure-A)

## ANNEXURE. REFEIUtED TO, IN REPLY TO PART (d) OF THE UNST'ARRED QUESTION NO.465 FOR ANSWER ON 22.07.2025

## Recommendations of High Level Committee, decisions taken by Government of India and Action

## Taken by FCI thereon

|   e |                                                                                                                                                                                                                                                                                                                               | Action Taken                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   1 | iiLC' recommends that FCI hand over all procurement operations of wheat, paddy and 'rice to states tilat '.h£rre gained sufficient 'experience in' this regard and have created reasonable I inttastnlcture for procurelnelt. These { States are , Andhra Pradesh, -Chhattisgarh, Haryana, Madhya Pradesh, Odisha and Punjab. | F CI has . already handed over- procurement operations fully to State Government in Andhra Pradesh, !. T61angana, Kerala, Tamil Nadu, Cbhattisgarh, Madhya Pradesh, Mdlaras Il_tra, Gujarat, Himachal Pradg-sh, I'Uttarakhand, Bihar, Jhark_hand,West Bengal, Odisha and i-rip lira. Recently, Assam hasadoptedDCP mode of Procurement 'for.Rice in two' districts namely Borlgaigacn and B ishwanath Districts from KMS 2023.-24. FC 1 {'is puTticipating in .procurementoperations .in Punjab and Haryana on the request of concerned State Governments I FCI procuredaround0.2% of paddy and around7% of wheatduring KMS 2023-24andRMS 2025-26, respectively, out of total -procurement done for Central Pool. Remaining procurement is done by State Government and its Agencies. I'he details of DCP States for procurement of wheat and rice are as under: |

|    |                                                                                                                                                 | DCP States for Rice & Wheat                                                                                                                     | DCP States for Rice & Wheat                                                                                                                     | DCP States for Rice & Wheat                                                                                                                     |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                 | SI. No.                                                                                                                                         | RICE                                                                                                                                            | WHEAT                                                                                                                                           |
|    |                                                                                                                                                 | 1                                                                                                                                               | Andhra Pradesh                                                                                                                                  | Bihar                                                                                                                                           |
|    |                                                                                                                                                 | 2                                                                                                                                               | Bihar                                                                                                                                           | Chhattisgarh                                                                                                                                    |
|    |                                                                                                                                                 | 3                                                                                                                                               | Chhattisgarh                                                                                                                                    | Gujarat                                                                                                                                         |
|    |                                                                                                                                                 | 4                                                                                                                                               | Gujarat                                                                                                                                         | Madhya Pradesh                                                                                                                                  |
|    |                                                                                                                                                 | 5                                                                                                                                               | Karnataka                                                                                                                                       | Maharashtra                                                                                                                                     |
|    |                                                                                                                                                 | 6                                                                                                                                               | Kerala                                                                                                                                          | Punjab                                                                                                                                          |
|    |                                                                                                                                                 | 7                                                                                                                                               | Madhya Pradesh                                                                                                                                  | Uttarakhand                                                                                                                                     |
|    |                                                                                                                                                 | 8                                                                                                                                               | Maharashtra                                                                                                                                     | West Bengal                                                                                                                                     |
|    |                                                                                                                                                 | 9                                                                                                                                               | Odisha                                                                                                                                          | Himachal Pradesh                                                                                                                                |
|    |                                                                                                                                                 | 10                                                                                                                                              | Tamil Nadu                                                                                                                                      |                                                                                                                                                 |
|    |                                                                                                                                                 | 11                                                                                                                                              | Telangana                                                                                                                                       |                                                                                                                                                 |
|    |                                                                                                                                                 | 12                                                                                                                                              | Tripura                                                                                                                                         |                                                                                                                                                 |
|    |                                                                                                                                                 | 13                                                                                                                                              | tJttarakhand                                                                                                                                    |                                                                                                                                                 |
|    |                                                                                                                                                 | 14                                                                                                                                              | WestBengal                                                                                                                                      |                                                                                                                                                 |
|    |                                                                                                                                                 | 15                                                                                                                                              | Himachal Pradesh                                                                                                                                |                                                                                                                                                 |
|    |                                                                                                                                                 | 16                                                                                                                                              | Jharkhand                                                                                                                                       |                                                                                                                                                 |
|    |                                                                                                                                                 | 17                                                                                                                                              | Assam (Only in two districts Bongaigaon and Bishwanath)                                                                                         | i.e.                                                                                                                                            |
| 2. | surplus(after For decentralizedprocurement ( DCP) states only surplus foodgrains are accepted by FCI. states under governments moved to deficit | surplus(after For decentralizedprocurement ( DCP) states only surplus foodgrains are accepted by FCI. states under governments moved to deficit | surplus(after For decentralizedprocurement ( DCP) states only surplus foodgrains are accepted by FCI. states under governments moved to deficit | surplus(after For decentralizedprocurement ( DCP) states only surplus foodgrains are accepted by FCI. states under governments moved to deficit |

3.

4.

FCl' should move on to  help those states whcre  farmers suffer  from distress  sales at  prices much belowMSP, and which are dominated by small  holdings, like Eastern Uttar Pradesh, Bihar, West Bengal, Assam etc

Continuous efforts and hand holding to the State Govt. agencies have been extended in the Eastern and NorthEastern States to  increase the penetration of  MSP operation. In  KMS  2021-22, 107.31 LMT  paddy (in  terms of  rice) was procured in  Eastern/ North  -  Eastern States as against 105.77 LMT  paddy (in  terms of rice) procured during KMS  2020-21 . In KMS  2022-23 and KMS  2023-24 a quantity of 99.36 LMT  and 76.83 LMT paddy (in terms of  rice) respectively has been procured in Eastern States. During  KMS  2024-25, 90.36 LMT Paddy (in terms of rice) has been procured in Eastern States up to 15.07.2025.

Emphasis has also been given on procurement of wheat in Eastern States such as UP &  Bihar. Procurement of wheat in Bihar and UP has increased during RMS 2025-26 in comparison  to last two marketing seasons due to early and vigorous efforts from DFPD, FCI as well  as State Govts.

- Quality  checks .in .procurement  ha-''e to  }  !.  Random Samples of  food-grains  procured &  'stored in  various FCI  godowns are periodically  referred to

! be adhered toP and anyihid' below the i  FSS Al notified 'NABL accredited labs for quality checks. specified  quality  will  not  be acceptable under central pool. Quality checks can pally  ' acLredi fed 'agency  in . a iran;parent mmmer wiTh the '  help of nlecianized processes ' of checking. -

- be done eithe;by Fei ahl  of any third  3 .  PCI  has set UP ' an ultra-modern Qualify  Control Lab at Institute of  Food Security ( IFS) Gurug}-am which  is  equipped with  modern analytical equipments' Further, four ( 04) Modern Zonal  Labs at  Panchkula, Hyderabad,  Raipur  and Bhubaneswar with  facilities  for  testing  of qu'ality ' chemical pararneters of food grains including level of fortincants in fortified rice has also been I  set  UP'

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1. Depot Online  System (DOS): Depot Online system with the goal of  computerization/automation  of procurement, storage  and movement operation was launched on 01.12.2018 and currently operative in all own FCI depots as well  as hired depots.

2. WINGS: To automate the tagging of rice mills with depots, as well as allocation of stack space in the depots, FCI  has developed the Warehouse Inventory  Network  &  Governing  System (WINGS).  Automated linkage plans  generated  by  the  system  promote  heightened  transparency  among  millers. This  automated system empowers the millers  to book stack spaces in depots and ensures efficient  utilization  of  depot spaces. This system is now fully  operational in all rice procuring region from KMS 2023-24.

3. The Central  Foodgrains Storage Portal  (CFSP), launched in 2022 by the NIC  and FCI, aims to create a unified national platform for managing decentralized procurement (DCP) stocks. The  CFSP  enhances efficiency,  transparency, and reliability in  foodgrain storage, supporting better decision making and stronger management of national food reserves.

|    | than 3 months. Silo bag technology and conventional storages where ever possible should replaceCAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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|  9 | HLC observedhuge disparity in wages of various kind of labour force engaged by FCI. This happens because of the incentive system in notified depots, and widely used proxy labour. This must be fixed, either by de-notifying these depots, or handing them over to states or prrvate sector on service contracts, and by fixing a maximum limit on the incentives per person that will not allow him to work for more than say 1.25 times the work agreed with him. These depots should be put on priority for mechanizationso that reliance on departmental labour reduces. If need be, FCI should be allowed to hire people underDPS/NWNP system. HLC recommendsthat the condition of contract labour, which works the | • Ministry of Labour and Employment vide notification dated 06.07.2016 exempted all 226 depots/railheadsfrom the applicability of Section 10 of Contract Labour (R&A) Act 1970 for a period of 2 years and since then they have been granting extension of exemption. • Nodal Officers have been appointed at field level for improving the working condition of contract labour and to ensure better facilities and adequate welfare provisions like EPF, Minimum wages, ESI, Workmen Compensationetc and facilities like canteen/restroom, urinals, drinking water facilities. • The Departmental Labour cadre has been declared a 'Dying Cadre' by the Ministry of Consumer Affairs, Food & Public Distribution, in accordance with the judgment dated 20.11.2015 by the Hon'ble High Court of Bombay, Nagpur Bench,in PIL No. 84/2014. • The Voluntary retirementscheme for DLS workers has been introduced with the approval of the Ministry of CA, F&PD for initially 90 days. Subsequently, on request of field offices/ labour unions was extended till 20.01.2025. As on 20.01.2025, a total of 1,212 Departmental Labourers opted for VRS |

|    | hardest and are the largest in number, should be improved by giving them better facilities.                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| 10 | HLC recommends total end to end computerization of the entire food management system, starting from procurement from farmers, to stocking, movement and finally distribution through TPDS. It can be done on real time basis, and some states have done a commendable job on computerizing the procurementoperations. But its dovetailing with movement and distribution in TPDS has been a weak link, and that is where much of the diversions take place. | The Anna Darpan Project is a direct implementation of the vision set forth by the Shanta Kumar Committee. The Anna Darpan Project ofFCI, which is currently under development, aligns with the vision of the Shanta Kumar Committee (2015), which strongly recommended the end-to-end digitisation of the entire supply chain managementsystem-from the procurement of foodgrains to their storage, movement, and final issuance to beneficiaries through designated agencies. The project is being developed as a centralized, integrated digital platform covering key functional areas such as procurement, storage, movement,sales, contract and inventory management,quality control and labour. Once implemented, it will enable real-time monitoring, integration with state procurement portals and enhance transparency and accountabilitythrough digital workflows and audit trails. Thus,Ama Darpan represents a major step toward modernizingFCI's operations in line with the committee's recommendations |

## 4. Central Food Grains Procurement Portal (CFPP):

Department of Food & Public Distribution  (DFPD), GoI has envisioned an application ecosystem, wherein the MSP procurement done by  government agencies is  available at a single  source by  integrating all  State procurement portals, with  common parameters, for monitoring and strategic decision making. The digitization of the entire procurement operations has been put in place with effect from Kharif Marketing Season (KMS) 2021 22

## 5. Vehicle  Location  Tracking System (VLTS) :

Food Corporation of  India (FCI) under the supervision of Department of Food &  Public Distribution is working  to  have a robust monitoring  mechanism for  transportation of  food grains using Road Transport Contractors (RTCs) from  dispatching depot till receiving depot. In  this regard, GPS enabled live tracking solution viz. Vehicle  Location Tracking  System (VLTS)  has been developed to, enable e-surveillance of food grains in-transit  (Rail  as well  as Road) and also curb the possibilities of  pilferage of  foodgrains enroute. State/UT Governments are also in the process of  implementing Vehicle  Location Tracking System (VLTS)  for live  tracking of end to end movement of.foodgrains  in the public distribution system. As on 04.07.2025 total 3(Pf transporters  have been onboarded  and total completed trips are 105301.