Restructuring FCI: Govt sets up high-level panel to remove cost inefficiencies

New Delhi: With a view to remove functional and cost inefficiencies at Food Corporation of India, the government today set up a high-level committee to suggest various models to restructure the state-run entity which plays a key role in strengthening public distribution system (PDS).

The FCI, set up under the Food Corporation Act 1964, is a nodal agency for procurement, storage and distribution of
foodgrains to PDS and other welfare schemes.

[caption id=“attachment_92691” align=“alignleft” width=“380”]  Representational image. Reuters[/caption]

“It is commonly perceived that FCI is plagued today with several functional and cost inefficiencies, which need to be removed for efficient management of foodgrains and saving costs. Therefore, it has been decided to set up a High-level Committee (HLC),” said an order issued by the Food Ministry.

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The eight-member panel, headed by Member of Parliament from Himachal Pradesh Shanta Kumar, will recommend onrestructuring of FCI after considering various aspects of present structure and functional areas of the organisation.

The panel will finalise its report and submit it to the government within three months, it added.

The terms of reference of the HLC is to study various models of restructuring or unbundling of FCI and to suggestthe best-suited model to improve its operational efficiency and financial management.

The panel will give suggestions to reorient the role and functions of FCI in the minimum support price (MSP)operations, storage and distribution of foodgrains and food security systems of the country.

That apart, the panel will recommend cost effective scientific models of storage, rationalised foodgrainsmovement, technology upgradation in foodgrains management and a way forward for integration of supply chain of foodgrains.

Other members of the committee include FCI Chairman-cum-Managing Director C Viswanath, former Chairman ofCommission for Agricultural Costs and Prices (CACP) Ashok Gulati and Electronic and IT Secretary Ram Sewak Sharma.

Chief Secretaries from Punjab and Chattisgarh governments, and two academicians – G Raghuram and GunmadiNancharaiah from IIM Ahmedabad and Hyderabad University, respectively, are also part of the committee.

Finance Minister Arun Jaitley, in his Budget 2014-15 speech, had given top priority to restructuring of FCI. He hadsaid: “Government is committed to reforms in the food sector.

Restructuring FCI, reducing transportation and distribution losses and efficacy of PDS would be taken up onpriority.” The FCI restructuring was one of the promises made by BJP in its manifesto for 2014 general elections.

Prime Minister Narendra Modi had been advocating unbundling of the FCI to bring efficiency in administrationand control food inflation.

PTI