The government has released Rs 13,000 crore as food subsidy to state-owned Food Corporation of India (FCI) in order to ensure smooth procurement and distribution of grains. The corporation is facing subsidy arrears of above Rs 55,000 crore as of March 31, 2015. The government has allocated Rs 97,000 crore as food subsidy for 2015-16 to FCI against an estimated bill of Rs 118,000 crore.
The bulk of the food subsidy is paid to FCI for running the public distribution system (PDS). Out of Rs 92,000 crore allocated as food subsidy in 2014-15 by the government, an amount of Rs 91,995.35 crore was given to FCI. The subsidy incurred in the year was Rs 102,476 crore.
FCI also has a cash credit limit of Rs 54,495 crore with a consortium of 67 banks at a rate of 10.51%. The corporation can additionally also raise short-term loan of up to Rs 30,000 crore by inviting tenders from banks.