The government has released Rs25,834 crore to state-owned Food Corporation of India (FCI) as food subsidy. In addition to this, the government will also release wage and means advance of Rs10,000 crore shortly, a government elease stated on Tuesday.
Besides, to meet working capital needs, FCI is also likely to raise short term loans from banks up to a maximum of Rs30,000 crore. These loans will be made by FCI as and when required.
''Taken together these funds, there will be sufficient resources to manage Rabi procurement which has just started,'' the statement added.
The government has earmarked Rs1,34,834.61 crore as food subsidy for 2016-17 fiscal. FCI has been facing a subsidy shortfall of Rs58,650 crore as of end-March 2016.
In 2015-16, original Food Subsidy allocation was Rs97,000 crore which was increased to Rs1,12,000 crore after revised estimates. This helped to bring down the arrears of subsidy to Rs58,650 crore. During 2016-17 also the government may consider additional food subsidy over and above budgetary provision, if required, towards the end of financial year to further bring down the subsidy arrears.
The bulk of the food subsidy is paid to FCI for buying foodgrains at support price and running the public distribution system (PDS).