New Delhi: State-run Food Corporation of India has asked the government to provide financial assistance of Rs 8,000 crore by increasing the paid-up capital for the current fiscal, a senior official said here on Tuesday.
The nodal agency for procurement and distribution of foodgrain, Food Corporation of India (FCI) is trying to raise funds to meet its working capital requirement through different routes, including bond markets.
Adequate and timely funds are required as FCI faces the daunting task of implementing the new food law, which aims to provide legal right over highly subsidised foodgrains to 67 percent of the country population.
"We have moved a proposal asking the Government of India to provide Rs 8,000 crore as equity, which we can use to finance our operations," a senior FCI official said.
For the current fiscal, the government had allocated Rs 73,500 crore to FCI, Of this, Rs 44,954 crore has been released so far. FCI also has dues to the tune of Rs 32,300 crore.
The FCI will require an estimated Rs 98,000 crore this fiscal towards operational expenses.
If Rs 8,000 crore is infused, the government's paid-up capital in FCI will increase to Rs 10,673 crore.
A proposal to raise Rs 8,000 crore funds via long-term bonds is still pending with the government.
The FCI had mopped up Rs 5,000 crore via long-term bonds last year.
Sources said FCI will have to wait for the proper time for raising funds from the bond market because the current situation is not suitable.
FCI procures rice, wheat and coarse cereals to ensure the minimum support price (MSP) to farmers.
It is also involved in storage and distribution of foodgrain for ration shops and various welfare schemes.
First Published: Tuesday, September 10, 2013, 19:35