Civil Supplies Corporation relies on bank loans to survive

The State Civil Supplies Corporation (APSCSC) has to depend on bank loans for procurement of rice, raagi etc. transport, storage, handling and distribution of food grains. It is “forced to avail” itself of the cash credit in view of the meagre internal resources.

The outstanding loan of the Corporation would be ₹5,000 crore to ₹7,000 crore, on average, every month. It would be more than ₹12,000 crore per annum. It is repaid as and when the government releases the subsidy component, which is shared by both the State and the Central governments, on the foodgrains procured and distributed through PDS network. The subsidy component would not be less than ₹1,000 crore per annum, sources say.

Subsidy-demand gap

Also there is a gap between subsidy and demand for procurement etc. The subsidy requirement for 2018-19 is ₹3,420.81 crore but the demand much higher. “As the Corporation has to pay the farmers within 48 hours of procurement, it has to rely on the bank loans. For instance, the subsidy component for 2014-14 financial year is yet to be cleared,” officials say.

Though the practice of loans has been in vogue for many years now, the problem got aggravated post bifurcation. The Centre has asked the AP and the Telangana governments to claim the subsidy through a joint account. It has led to the delay in the release of subsidy. About ₹800 crore to ₹1,000 crore is yet to be cleared by the Central government.

When contacted APSCSC Vice-Chairman and Managing Director A. Surya Kumari said the Corporation took government approval for bank loan. The Cash Credit Limit (CCL) was ₹13,000 crore. The Corporation has to pay ₹200 crore to ₹300 crore per day during the kharif season. The government bears the interest on the loans, she said.