Food subsidies got 4x in 10 years; Expenditure increased on buffer stock for free ration
Information and Broadcasting Minister Ashwini Vaishnav says that the food subsidy has increased four times in ten years from 2014 to 2024. Between 2004 and 2014, farmers were given food subsidies of only five lakh 15 thousand crores, which has increased to 21 lakh 56 thousand crores during the last decade.
The central government decided to make FCI financially stable since it understands the value of farmers' contributions to crop procurement and public distribution. FCI will receive an equity investment of Rs 10,700 crore for this.
140 crore people in the country depend on FCI to ensure their food security. Additionally, it oversees the distribution of food grains under the welfare program, the storage of grains, the management of pricing, and the procurement of grains from farmers at the Minimum Support Price (MSP).
After the Union Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnav said that FCI has a key role in the foodgrain procurement process. There has been a major increase in the procurement of food grains and MSP in the last decade. The objective of this decision is to promote the agriculture sector and ensure the welfare of farmers.
Ashwini Vaishnav said, "The Food Subsidy increased four times if we compare the ten years of 2014-24 with the ten years of the NDA government. Between 2004 and 2014, only Rs 5 lakh 15 thousand crore food subsidy was given to farmers, which has increased to Rs 21 lakh 56 thousand crore during the last decade.
This buffer stocking will help a lot in providing free rations to 80 crore people for the next five years. If we go back to five years of arranging for buffer stock, then the average was Rs 80 thousand crore. As of March 31 this year, there was a stock of Rs 98 thousand crore 230 crore. FCI took birth in 1964 with an institutional credit of just Rs 100 crore of authorized capital and Rs 4 crore of equity.
With the gradual proof of its efficiency, the requirement for it in the agricultural sector also increased, due to which, in February 2023, the authorized capital increased from Rs 11 thousand crore to Rs 21 thousand crore. Its equity stood at Rs 4,496 crore in the financial year 2019-20, which increased to Rs 10,157 crore in the year 2023-24. Now the Center has approved equity of Rs 10,700 crore for FCI, which will make it financially strong and encourage transformation initiatives.
Equity investment is necessary to enhance operational capacity. With this, FCI will be able to discharge its responsibility effectively. Because of shortages of funds, FCI is compelled to embrace short-term borrowings. This investment will reduce the interest burden and ultimately help in reducing subsidies of the Central Government.
