Government sets up high-level panel to look into FCI restructuring

NEW DELHI: The government plans to restructure the Food Corporation of India and overhaul the public distribution system with help from IIM-Ahmedabad Dean G Raghuram, agriculture specialist Ashok Gulati and some bureaucrats who will form a committee to make the system efficient.

The government had flagged the issue in this year’s Economic Survey, which advocated food stamps or direct transfer of food subsidy instead of procurement and distribution because that would be more effective and help cut fiscal deficit. The current system of procurement, storage and distribution of grain has faced widespread criticism because of inefficiencies, wastage and allegations of corruption at various stages.

The panel would include Ram Sweak Sharma, secretary for IT and electronics, to suggest ways to promote the use of technology in the system, a government statement said. The panel, headed by former Himachal Pradesh chief minister and Lok Sabha MP Shanta Kumar, would submit its report in three months.

“The FCI is vested with vital responsibilities of the government, such as procurement, management of central pool stocks and distribution of food grains to state government agencies for various food security programmes. It is commonly perceived that the FCI is plagued today with several functional and cost inefficiencies, which need to be removed for efficient management of food grains and saving costs,” the government said.

The committee would recommend steps for better storage, transportation and management of food grains. It would also examine the administrative, functional and financial structure of the FCI and its operations. It will study various models for restructuring or unbundling the agency.

The statement said the panel will give suggestions to reorient the role and functions of the agency in minimumsupport-price operations, storage and distribution of food grains and food security systems, as well as recommend a way forward for strengthening and integrating supply chain. It would suggest the most efficient and cost effective model from the point of view of storage and least-cost option of moving grains.