FCI Takes Short-Term Loans Again, Raises Rs 22,000 Cr
Due to the finance ministry's inadequate allocation of food security expenditures, the Food Corporation of India (FCI) has taken out a short-term loan of Rs 22,000 crore to support its operations in the current fiscal.
According to sources, the finance ministry has provided roughly Rs 52,000 crore under the food subsidy budget so far, while spending more than Rs 75,000 crore in the current fiscal. In the current month, the ministry has not provided any funding to the FCI under food security expenditures. FCI obtains 90-day short-term loans from scheduled banks to alleviate cash flow mismatches caused by the finance ministry's insufficient disbursement of food subsidies.
More short-term loans would have increased FCI's expenditures due to greater interest outflow. These short-term loans have annual interest rates ranging from 3.85 to 5.5%. Meanwhile, other ministries, including rural development, education, and external affairs, owe FCI almost Rs 2900 crore for grain provided for different social welfare initiatives.
The national government has allotted Rs 2.06 trillion for food subsidy costs in 2022-23, with FCI receiving Rs 1.45 trillion (71%). The remainder of the food subsidy is distributed directly to states. However, because the Pradhan Mantri Garib Kalyan Anna Yojana has been extended until September 30, an additional Rs 80,000 crore (Rs 56,000 crore through FCI) would be paid under the food subsidy budget.