FCI asks govt to clear dues of Rs 50,000 cr

FCI asks govt to clear dues of Rs 50,000 cr

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 per cent 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 per cent of the total capital.

"Out of FCI's total capital, the paid-up capital is about 2 per cent, while 98 per cent 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.

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