Food Corporation of India not to consider request by States for more foodgrains under open market scheme

A Food Corporation of India warehouse. File
| Photo Credit: The Hindu

As Opposition-ruled State governments such as Karnataka and Tamil Nadu criticised the Centre’s decision to restrict the supply of foodgrains through the Open Market Sale Scheme (Domestic) to 100 metric tonnes (MT), the Food Corporation of India (FCI) made it clear on June 23 that the Centre’s priority was to curb inflation.

Chairman and Managing Director of the FCI Ashok K.K. Meena told reporters that the maximum quantity to be sold through OMSS was limited to accommodate small wheat processors and traders. State governments had alleged that such a move was against the interest of the poor.

Controlling inflation

When asked about the complaint of the State governments, Mr. Meena said the State governments would keep on demanding. “State governments are going to give the foodgrains to the same beneficiaries under the Pradhan Mantri Garib Kalyan Ann Yojana or they would be using the foodgrains for State schemes where identified beneficiaries are there. The Government of India is already providing foodgrains for 80 crore people. Additionally, 60 crore consumers need to be taken care of. OMSS operations would be carried out in the interest of those 60 crore people so that inflation remains under control for the rest of the country,” Mr. Meena said.

He added that the government had now directed the FCI to conduct the e-auctions of wheat and rice to check the inflationary trends. “We will give 100 MT for a bidder. We are keeping another condition that whoever purchases cannot export or give it to another State’s agencies. We are giving only for consumption. They need to have a GST number and State governments are not permitted (to buy from bidders),” Mr. Meena said.

He said instruments, including reducing the import duty on wheat was under consideration of the Centre if inflationary trend continued. “Government will use other instruments if the prices do not come down. This includes reducing import duty on wheat,” he added.

He said no State would demand for additional foodgrains under OMSS as the Centre’s policy was clear. When asked about FCI’s earlier promise to give food stocks to Karnataka, he said the government worked at different levels. “When the government policy in writing is available, the government has functional autonomy to take decision based on the existing policy. So some order was issued. The Karnataka regional officer of FCI did not know that such discussions were going on. So the moment government order was issued, and the policy was changed, the Karnataka region has taken immediate steps and complied with the Centre’s decision,” he said.

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He said Manipur was the only State which received foodgrains under OMSS as an exemption considering the law and order situation. “The bidding is also limited to the local buyers by ensuring that the GST registration of the State is mapped and checked before stocks are released. These measures are taken to ensure a wider local reach for the stocks offered in a particular State. Four MT of wheat is being offered in the first e-auction from 457 depots across the country,” he said adding that 5 MT rice would be offered in the next auction scheduled in July.