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Shantha Kumar Panel submits report on FCI restructuring

The Government of India set up a High Level committee (HLC) of eight members on restructuring the Food Corporation of India (FCI) on August 20, 2014. Shanta Kumar, the committee’s Chairman submitted the report to prime minister Narendra Modi.

The major issue before the committee was how to make the food grain management system more efficient. The committee had wide consultations with several chief ministers of the states, food secretaries and also with public.

Key Recommendations

  • Cutting down taxes levied on food grains (wheat and paddy) procured in the state from the present 14.5% to just 3%.
  • Focusing on eastern states such as Uttar Pradesh, Bihar, West Bengal and Assam, where farmers sell their produce in distress.
  • Revisiting the policy of minimum support price (MSP)
  • Deregulating the fertilizer sector by directly transferring Rs 7,000 per hectare as subsidy to the farmers
  • Outsourcing storage operations
  • Converting FCI godowns into silos.
  • Cash transfer to beneficiaries of PDS
  • Movement of grain be done in containers instead of gunny bags.

Knowledge is Wealth

  • The Food Corporation of India was setup under the Food Corporation’s Act 1964
  • Food Corporation of India (FCI) was set up on 14 January 1965 having its first District Office at Thanjavur, Tamilnadu.
  • The current Chairman and Managing Director of FCI is C Viswanath
  • FCI procures 15 to 20 per cent of India’s wheat output and 12 to 15 per cent of its rice output at minimum support price.