New Delhi: Faced with liquidity crunch, state-run Food Corporation of India (FCI) has asked government to clear dues of Rs 50,000 crore in a phased manner.
The dues have accumulated to Rs 50,000 crore at the end of 2013-14 due to lesser allocation of funds against the estimated subsidy bill in last three-four years.
The FCI has also asked the government to allow it to securitise the dues for raising funds from markets, sources said.
In a letter to the Food Ministry, the FCI has asked the government to clear Rs 50,000 crore dues in a phased manner, sources said.
"FCI's food subsidy dues at the end of 2013-14 had touched Rs 50,000 crore as government has allocated 60-80 percent of the estimated subsidy bill only in the last three-four years," a source said.
In the current fiscal, the cash-starved nodal agency for public distribution of foodgrain, had raised short-term loan of Rs 20,000 crore twice for smooth procurement and distribution of foodgrains.
Its long-term borrowings at the moment are about Rs 72,000 crore.
Earlier, the corporation had also requested the government to raise its paid-up capital in the corporation to about Rs 15,000 crore from Rs 2,675.95 crore as on March 31, 2014, which is about 2 percent of the total capital.
"Out of FCI's total capital, the paid-up capital is about 2 percent, while 98 percent is the loan capital. So, in long-term perspective for ending this liquidity crisis, it will be better to increase the paid-up capital in the corporation," the source added.
Besides arrears, the delay in subsidy payments is also adversely impacting the FCI.
The FCI's subsidy has risen sharply in the last few years due to increase in the minimum support prices (MSP) for wheat and rice and high procurement, storage and distribution costs.
The economic costs comprising MSP, procurement, storage and distribution for wheat stood at Rs 1,494.35 per quintal and that of rice were at Rs 1,983.11 per quintal in 2010-11.
While in 2013-14, economic costs of both wheat and rice have gone up to Rs 1,932.39 per quintal and Rs 2,638.54 per quintal, respectively.
