Lok Sabha Question No. 3491 (UNSTARRED), answered on 2015-08-11
Subject: Subsidy Dues
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: R. PARTHIPAN

## MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION

## GOVERNMENT OF INDIA DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION

## LOK SABHA UNSTARRED QUESTION NO. 3491

TO BE ANSWERED ON 11 TH  AUGUST, 2015

## SUBSIDY DUES

3491. SHRI R. PARTHIPAN:

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

- (a) whether the subsidy arrears of the Food Corporation of India (FCI) are outstanding  against  the  Government  have  been  rising  if  so,  the  details thereof and the reasons therefor indicating the amount outstanding during each of the last three years;
- (b) whether procurement operations undertaken by FCI are likely to be affected due to paucity of funds;
- (c) if so, the details thereof and the corrective steps taken in this regard; and
- (d) whether there is any proposal before the Government to raise funds from the Life Insurance Corporation of India in form of long term loans to provide funds to FCI, if so, the details thereof and the time by which it is likely to be approved?

## A N S W E R

## MINISTER OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION (SHRI RAM  VILAS PASWAN)

(a): `Yes  Madam. The subsidy arrears of the Food Corporation of India (FCI) have been rising over the years due to less allocation of funds from the Budget for Food Subsidy compared to projected requirement.

The details of progressive outstanding food subsidy arrears of FCI against Government of India as on 31st March, 2015 are given as under:

(Rs in crores)

| Year         | Opening Balance of outstanding subsidy   | Total subsidy claim for the year (including outstanding balance)   | Subsidy released during the Year   | Closing Balance of outstanding subsidy   |
|--------------|------------------------------------------|--------------------------------------------------------------------|------------------------------------|------------------------------------------|
| 2012-13      | 23,427                                   | 1,03,733                                                           | 71,980                             | 31,753                                   |
| 2013-14      | 31,753                                   | 1,21,133                                                           | 75,500                             | 45,633                                   |
| 2014-15 (RE) | 45,633                                   | 1,48,109                                                           | 91,995                             | 56,114                                   |

- (b) & (c): Since most of the procurement is done by State Governments/designated  agencies,  FCI  is  required  to ensure  timely payment  of  procurement  incidentals  to  them  against  delivery  of  food grains  for  Central  Pool  operations.  However,  owing  to  substantial  gap between  requirement  of  funds  and  actual  budgetary  allocation  from Government  of  India,  FCI  had  to  stop  the  payments    intermittently  on three occasions to State Agencies in Financial Year 2014-15 which might have  caused  some  inconvenience  to  State  Governments/  designated agencies.

This  Department  has  regularly  been  pursuing  the  matter  regarding allocation of sufficient fund for FCI in order to ensure smooth procurement  operations.  Though  Government  has  also  increased  the budgetary  allocation  for  food  subsidy  in  recent  years  but  owing  to resources constraints and other pressing financial commitments, allocation  made  is  still  insufficient  to  meet  the  actual  requirement  of funds for FCI.

Some  of  the  measures  taken  by  the  Government  to  make  available sufficient funds to FCI for timely payments to state governments/agencies for smooth procurement operations, are as under:

- (i) Sanction of Cash Credit Limit (CCL) of Rs.54495 crore.
- (ii) Enhancement  of  limit  of  Short  Term  Loan  from  Rs.20000  crore  to Rs.30000 crore.
- (iii)   Sanction of Ways and Means Advance of Rs.10000 crore.
- (d): A proposal to this effect has been received from FCI and the same is under active consideration of the Ministry of Finance.

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