2. 1.1
A Brief History of Food Corporation of India :-
The Food Corporation of India was set up under the food Corporation Act 1964 and on
14th January, 2013, FCI completed 49 years of its existence.FCI was set up to secure
strategic position in food grains trade and implement the National Policy for Price
Support operations, procurement, storage, inter-state movement and distribution
operations, in short to operate the Central Pool. Today FCI is the country leader in food
grains management and is fully focused on helping Farmers feed the country, better and
more efficiently, today and tomorrow.
Food constitutes the main requirement of every human being. In a sub-continent like
India where millions of mouths depend to targeted Public Distribution System (TPDS)
and other welfare schemes of Govt. of India, FCI, plays a leading role in making food
grains available to the extent of 30 lakh tones during a month, to respective State Govts.
For its distribution among beneficiaries. To procure, store, preserve and move such a
huge quantity of stocks spreading over vast areas with its intricate network is, indeed, a
nerve and back-jerking tasks.
To nurture the Green Revolution, the Government of India introduced the scheme of
minimum assured price of food grains which are announced well before the
commencement of the crop seasons, after taking into account the cost of production/intercrop price parity, market prices and other relevant factors.
The food Corporation of India alone with other Government agencies provide
effective price. Assured for wheat, paddy and coarse grains.
2
3. FCI and the State Govt. agencies in consultation with the concerned State
Govts. Establish large number of purchase centers throughout the state to
facilitate purchase of food grains.
Centers are selected in such a manner that the farmers are not required to
cover more than 10 kms. to bring their produce to the nearest purchase centers
of major procuring states. Price support purchases are organized in more than
12,000 centers for wheat and also more than 12,000 centers for paddy every
year in the immediate post-gravest season.
Such extensive and effective price support operations have resulted in
sustaining the income of farmers over a period and in providing the required
impetus for higher investment in agriculture for improved productivity.
To name a few states about Rs.41,000 millions for paddy and 43000 millions
for wheat in Punjab.
And Rs.45,000 millions for levy rice in Andhra Pradesh is paid to the
farmers/millers during wheat/rice procurement season.
India today produces over 200 million tonnes of food grains as against a mere
50 million tons in 1950.
In the last two decades, food grain procurement by Government agencies have
witnessed a quantum jump from 4 million tones to over 25 million tonnes per
annum.
Food grains are procured according to the Government – prescribed quality
standards.
3
4. Each year, the Food Corporation purchases roughly 15-20% of India‟s wheat
production and 12-15%of its rice production.
This helps to meet the commitments of the Public Distribution System and for
building pipeline and buffer stock.
1.2
Vision 2020 :To aggressively promote Decentralized Procurement by State Governments
with special emphasis in non-traditional areas and commodities.
To initiate procurement of non-MSP governed commodities on commercial
principles.
To ensure adequate buffer for meeting requirements under TPDS & Other
Welfare Schemes.
To dispose off surplus and un-storage worthy godowns and introduce
concepts of mechanized handling in the conventional godowns.
To undertake R&D for conversion of some of the existing capacity to bulk
and cost effective utilization of existing bulk capacity.
To optimize monthly movement programme with existing state of art of
computerization within the country at various locations as per corporate
policies and priorities.
Modernization of Quality Control equipments and systems for food
4
5. preservation in order to increase the shelf life of food grain.
To venture in the fields of Forward Trading and Exports of both surplus
stocks of food grains in Central Pool and no-traditional commodities.
To introduce state of art of financial management in order to reduce the
dependency on the present banking system in the country.
To initiate systems for settlement of storage loss and transit loss through
insurance coverage and revised inventory mechanism.
To develop efficiency in human resource management both in staff/officers
and workers with changed circumstances in the work approach of P.S.Us.
To achieve state of art in computerized communication between different
offices/ depots throughout the country.
1.3
Mission :Fulfillment of all the targets set as per Govt. of India Food Policy
from time to time.
Monitoring of quality in all major transactions, processes leading to
improve customer satisfaction level.
Accountability for efficiency, responsiveness, performance and
minimization of all losses and wastes.
5
6. Need based up-gradation of infrastructure and work environment.
Need based enhancement of available knowledge and skills.
Transparency in decision making, effective communication leading
to harmonious employee relations.
1.4
Objectives of FCI :To provide farmers remunerative prices.
To make food grains available at reasonable prices, particularly to vulnerable
section of the society.
To maintain buffer stocks as measure of Food Security.
To intervene in market for price stabilization.
6
8. 1.5
Quality Policies :-
FCI, as the country‟s nodal organisation for implementing the National Food Policy, is
committed to provide credible, customer focused services, for efficient and effective food
security management in the country. Our focus shall be :
Professional excellence in Management of food grain and other commodities
Service quality and stake holder orientation
Transparency and accountability in transactions
Optimum utilization of resources
Continual improvement of systems, processes and resources
1.6
Quality Objectives :Fulfillment of all the targets set as per Govt. of India Food Policy from time to
time.
Monitoring of Quality in all major transactions, processes leading to improved
customer satisfaction level.
Accountability for efficiency, responsiveness, performance and minimization of
all losses & Wastes.
8
9. Need based up gradation of infrastructure and work environment.
Need based enhancement of available knowledge & skills.
Transparency in decision making, effective communication leading to harmonious
employee relations.
Establishing, maintaining and improving ISO 9001 :2000 based Quality
Management Systems covering all areas of activity.
9
11. 2.1 SWOT Analysis of Food Corporation of India :-
2.1.1 Strength
Round the year availability of materials
Support from the central government
Strong network of distribution
Excellent storage management
2.1.2 Weakness
High requirement of working capital
Corruption at all level
Inadequate automation with regard to information management
Leakage
2.1.3 Opportunities
Improvement in distribution level
Diversify into non-distributional commodities/activities
Vast domestic market
11
12. 2.1.4 Threats
Rapid development
Entry of retail sector
Shift in food habits
2.2 Enormity of Scale :Countrywide network of offices & strategically located Food Storage Depots.
Operates in mandis/purchase centers located within 10 kms. proximity of
farmers.
Undertakes purchases of 30 to 40 million tons annually making it the largest
buyer in the world.
12
14. 3.1 Departmental Labour System (DLS) :Under this system, regular time scale of pay as given below are applicable to the
workers :-
*The pay scales are due for revision from 01.01.201
Table No.-1
Source:
http://fciweb.nic.in//upload/IR_L/brief%20note%20on%20labour%20system%20in%20f
ci_eng_29082013.pdf
Apart from the above pay scales, statutory benefits of ex-gratia in lieu of Bonus, PLI,
CPF, Gratuity and Welfare benefits of various types of leaves, uniform, LTC, HBA,
Festival Advance, medical facility, L.T.C./Bharat Darshan, Children education
allowance, etc are also extended to the workers. The Departmental Workers are given
Minimum Guaranteed wage for 21 days in a month in addition to 4 or 5 paid weekly offs
even if FCI is not able to provide any work or sufficient work to labourers for all the
working days of the month provided the worker has attended the work spot on all the
working days of the month.
14
15. 3.2 Direct Payment Labour System (DPS) :This system is presently functioning in 219 depots. In this system, the workers are
paid piece rates on ASOR% basis, as in case of contractors. The Workers are paid actual
earnings on Piece Rate/ASOR% for the quantum of work done or the minimum
guaranteed wage, whichever is higher. The Piece Rate/ASOR %age is not applicable in
case of Ancillary labourers. The DPS workers have been given the benefits of CPF in
addition to the benefits of Ex-Gratia / PLI / Gratuity / Workmen‟s Compensation, Paid
Weekly Off, National Holidays, Sick Leave, Medical First Aid and Medical Facility
(Indoor/Outdoor) under ESI Act.
The minimum daily wages for “A” areas as fixed under Minimum Wages Act by the
Government of India, Ministry of labour & Employment after every six months are
admissible to the workers. The Piece Rate/ASOR% are revised every six months based
on the changes in All India Consumer Price Index. The present rates of Min. Wages &
Piece Rates are as under :-
*Next Revision due from 01.04.2013
Table No.-2
15
16. 3.3 No Work No Pay System (NWNP) :This system is popularly known as „No Work No Pay‟ (NWNP) System or Three
Member Committee (TMC) System. The system is presently prevailing in 83 functional
depots throughout the country. Under this labour system, payment for the actual quantum
of work done is made on the basis of prevailing Piece Rate/ASOR% of the region or the
minimum guaranteed wage, whichever is higher. However, payment is made only on the
days when there is actual work available in the depot. In addition, the benefits of EPF,
Ex-Gratia in lieu of Bonus, three national holidays, paid weekly off under Minimum
Wages Act, Medical facility(Indoor/Outdoor) under ESI Act are extended to these
workers.
The minimum daily wages as fixed under Minimum Wages Act by the Government of
India, Ministry of labour & Employment every six months are admissible to the Handling
Labour. The Piece Rate/ASOR% is revised every two years based on the changes in All
India Consumer Price Index. The present rates of Min. Wages area-wise are as under :„A‟ Area - 279/- „B‟ Area - 231/- „C‟ Area - 186/-
16
17. 3.4
Distribution of Food grains :-
The national objective of growth with social justice and progressive improvements in
the living standards of the population make it imperative to ensure that food grain is
made available at reasonable prices.
Figure No.-2
Distribution of Food Grains
Public Distribution of food grains has always been an integral part of India.
Overall food policy. It has been evolved to reach the urban as well as the rural
population in order to protect the consumers from the fluctuating and escalating
price syndrome.
Continuous availability of food grain is ensured through about 5 lakh fair price
shops spread throughout the country.
The Govt. of India introduced a scheme called Targeted Public Distribution
Scheme (TPDS) effective from June, 1997.
17
18. Figure No.-3
Remote Hill Areas
Below Poverty Line (BPL): Determination of the families under this category in
various states is based on the recommendation of the Planning Commission. A
fixed quantity of 35 Kg food grains per family per month is issued under this
category. The stocks are issued at highly subsidized Price of Rs.4.15 per Kg of
wheat and Rs.5.65 per Kg of rice.
Antyodaya Anna Yojna - During the year 2000-2001 Govt. of India decided to
release food grains under Antyodaya Anna Yojna. Under this scheme the poorest strata of
population out of earlier identified BPL population is covered. Food grains are being
provided to 2.5 crores poorest of the poor families out of the BPL families at highly
subsidized rates of Rs.2/- per kg of wheat and Rs.3/- per kg of rice by FCI. This is the
biggest food security scheme in the world.
18
19. Above Poverty Line ( APL) ? Families which are not covered under BPL are
placed under this category. The stocks are issued at Central Issue Price of Rs.6.10
per Kg of wheat and Rs.8.30 per Kg of rice.
The Central Issue Price (CIP) :(Rate: Rs./Qtl.)
Commodity
Effective
BPL Families APL Families
From
Wheat
AAY
Families
01- 07- 2002
415
610
200
Rice Common 01- 07- 2002
565
795*
300
Rice Grade-A 01- 07- 2002
565
830
300
(*): Applicable to J&K, Himachal Pradesh, Sikkim, Uttaranchal and NE States
Table No.-3
19
20. 3.4.1
There are number of other welfare schemes of the Govt. of India :
(a) Mid-Day-Meal-Scheme (MDM)- The Govt. of India have introduced MDM ?
National Programme of
Nutrition Support to Primary Education in Primary Schools
w.e.f.15.8.1995.Under the scheme every students upto 5th class of Govt. schools is
entitled for 3 Kgs of wheat/rice per month @ 100 Grams.
Since October 2007 allocation of food grains have also been made for the students from
6th to 8th class in the educationally backward blocks and every student is entitled for 150
Grams of food grains per child per school day.
The Scheme is partly run by Govt./Aided Schools/Local Bodies to serve free cooked /
processed hot meal.FCI is supplying food grains free of cost to the State/UTs. This
scheme is partly financed by Ministry of HRD.
(b) Wheat Based Nutrition Programme (WBNP) - A scheme run by Department of
Women and Child Development, Ministry of Women & Child Development for
providing nutritious food to children below 6 years of age and expectant/lactating
women. Food grains supplied by FCI at BPL rates.
(c)&(d) SC/ST/OBC Hostels & Welfare Institutions & Hostels- The Ministry of
CAF&PD and the Ministry of Social justice & Empowerment coordinate to monitor of
the Scheme for providing food grains to SC/ST/OBC Hostels. Hostels having students
belonging to SC/ST/OBC categories are eligible to draw 15 Kgs Food grains per resident
per month.
20
21. The Government of India decided that w.e.f.2.11.2000 food grains (wheat/rice) will
also be allotted to the state Governments at the rate of 5 Kg per head per month for
indigent people living in Welfare Institutions, such as, Beggar Homes, Home for Nari
Niketan, etc. sponsored by the State Govts. and the concerned administration. Food
grains are supplied by FCI at BPL rates. It may be clarified that from the year 2002-03,
the MOCAF&PD has been making the requirement of the State/UT under the head
"Welfare Institutions & Hostels" to meet the requirement of the State/UT for providing
food grains to different type of welfare institutions. Since April 2005, the Ministry of
CAF & PD has enhanced quota of allotment under this scheme to 5% of the monthly
allotment made under BPL & AAY. Presently, the food grains is being allotted by
MoCAF & Pd on the basis of average off take during last three years under the scheme.
(e) Annapurna Scheme- Indigent Senior Citizens of 65 years of age or above eligible for
National Old Age Pension under NOAPS, but not getting pension can get 10 Kgs of food
grains per month.FCI is issuing food grains under this scheme to State/UT Govts. at BPL
rates.
Under This scheme of Ministry of Social Justice & Empowerment, Indigent people
living in Welfare institutions like Beggar Homes, Orphanages, Nari Niketans, etc. are
given 15 kgs of food grains per person per month. Food grains are supplied by FCI at
BPL rates. Presently, the scheme is being run by the Ministry of CAF&PD.
(f) Sampoorna Gramin Rozgar Yojana- A scheme financially supported by Ministry of
Rural Development in which food grains are supplied to the States/ UTs by FCI free of
cost.
21
22. (g) Special Component of Sampoorna Gramin Rozgar Yojna - Under the Special
component of the SGRY financed by Ministry of Rural Development for augmenting
food security through additional wage employment during natural calamity.FCI release
food grains free of cost to the State/UTs.
Since 1st April 2008 no allotment of food grains has been made by the Govt. of India
under SGRY.
(h) Food grains to Adolescent Girls Pregnant and Lactating Mothers ( AGPLM) - GOI
introduced this Scheme w.e.f. January, 2003 Under this scheme food grains is being
supplied by FCI at BPL prices to the State/UT Govt. for Adolescent Girls, Pregnant and
Lactating Mothers ( AGPLM).The identified under nourished woman/girl is provide 6 Kg
of food grains (wheat/rice)/month. The scheme is partly supported by Planning
Commission. The scheme is being run by MoCAF & PD with the new name Nutritional
Programme for Adolescent Girls (NPAG).
(i) World Food Programme (WFP) - FCI is sparing stocks to WFP projects from the
Central Pool stocks as and when required by them.FCI is working as 'FOOD BANK' for
World Food Programme(WFP) projects in India .When India was deficit of food grains,
WFP used to get stocks to meet the deficiency through import.
(J) Emergency Feeding Programme - Under this scheme, Ministry of CAF & PD
releases allocation of rice at BPL rates, for KBK Districts (Bolangir, Kalahandi, Koraput,
Malakangiri, Nabarangpur, Naupada, Rayagada & Sonepur) of Orissa State on monthly
22
23. basis. Under this scheme, rice @ 7.5 kg/beneficiary/month is issued for 2 lakh
beneficiaries. This programme is being run by the Ministry of CAF & PD.
(k) Grain Bank - This scheme provides Grants for establishment of village Grain Bank
to prevent deaths of Schedule Tribes specially children in remote and backward tribal
villages facing or likely to face starvation and also to improve nutritional standards. The
scheme provides funds for building storage facility, procurement of weights & measures
and for the purchase of initial stock of one quintal of food grains of local variety for each
family. The allocation of food grains was made by the GOI, Ministry of Tribal Affairs
during the year 2002-2003.Under this scheme food grains are allotted to States at BPL
rate. Since, 2006-07 the scheme is being run by Ministry of CAF & PD. The cost of food
grains as food component is being paid to FCI in advance at economic cost. State Govts.
are lifting food grains free of cost from FCI.
(l) National Food for Work Programme - this programme has been launched by the
Prime Minister during November 2004 for providing food grains in identified 150 most
backward districts of the country. The beneficiaries of this programme are labourers
engaged by the State Govt. in development work. Food grains is given as part of wages
under the scheme to the rural poor at the rate of 5 kg per man-day. More than 5 kg food
grains can be given to the labourers under this programme in exceptional cases subject to
a minimum of 25% of wages to be paid in cash. Under this programme food grains are
issued to states/UTs free of cost. This scheme is mentored by Ministry of Rural
Development.
23
25. 3.5 Human Resources Development :-
The Corporation has its own Training Institute, namely, the “Institute of Food Security
(IFS)” at Gurgaon (Haryana).The Institute conducts regular short term training
programme on various functional subjects, managerial skills and computers primarily for
officers of the rank of Managers and Assistant General Manger.IFS also imparts on the
job training to newly recruited Management Trainees and also coordinates training
programmes through Indian Grain Storage Management and Research Institute (IGMRI)
on Scientific Storage and Quality Management of food grains for the farmers and
officials of the State Agencies under FCI`s Corporate Social Responsibility.
Table No.-5
Source: FCI Annual Report 2012-2013
25
26. 3.6
Duties and Responsibilities of FCI workers :-
3.6.1 Do’s :
Maintain absolute integrity at all times.
Maintain absolute devotion to duty at all times.
Act in accordance with the Government policies regarding age of marriage, preservation
of environment, protection of wildlife and cultural heritage.
Observe Government‟s policies regarding prevention of crime against women.
Take prior permission for leaving station/headquarters
Maintain independence and impartiality in the discharge of duties.
Maintain a responsible and decent standard of conduct in private life and maintain his
family properly.
Manage his private affairs as to avoid habitual indebtedness or insolvency.
Render prompt and courteous service to the public.
Observe proper decorum during lunch break.
Report to superiors the fact of arrest or conviction in a Criminal court and the
circumstances connected therewith, as soon as it is possible to do so.
Report to the Government if any member of his family is engaged in a trade or business
or owns or manages an insurance agency or commission agency.
Keep away from demonstrations organized by political parties in
the vicinity/neighborhood of Government offices.
26
27. Maintain political neutrality.
If any legal proceedings are instituted for the recovery of any debt due from him or for
adjudging him as an insolvent, report full facts of such proceedings to the Competent
Authority.
Observe courtesy and consideration to Members of Parliament and State Legislatures.
Intimate the Government the marriage with a person other than of Indian nationality.
Intimate the Government if the total transaction in shares, securities, debentures or
mutual funds scheme, etc exceeds Rs.50,000 & Rs.25,000/- during the calendar year, in
the case of Group „A‟ & „B‟ Officer and Group „C‟ Officers respectively.
In performance of duties in good faith, communicate information to a person
in accordance with the “Right to Information Act, 2005” (22 of 2005) and the rules made
there under.
3.6.2
Don’ts :
Do not make joint representations in matters of common interest.
Do not submit representation directly to higher authorities by-passing the prescribed
channel of communication.
Do not indulge in acts unbecoming of a Government servant.
Do not be discourteous, dishonest and partial.
27
28. Do not adopt dilatory tactics in his dealings with the public.
Do not convey oral instructions to subordinates.(If done for unavoidable reasons, confirm
them in writing as soon as possible.)
Do not practice untouchability.
Do not participate in proselytization.
Do not associate himself with any banned organisations.
Do not associate himself with any political party.
Do not join any association or demonstration whose objects or activities are prejudicial to
the interest of the sovereignty and integrity of India, public order or morality.
Do not give expression to views on Indian or foreign affairs, while visiting
foreign countries.
Do not get involved in unauthorized communication of any official document or any part
thereof or classified information to any Government servant or any other persons to
whom he is not authorized to communicate such document or classified information.
Do not join or support any illegal strike.
Do not enter into any private correspondence with Foreign Embassies or Missions/High
Commissions.
Do not accept lavish or frequent hospitality from any individual, industrial or commercial
firms, organisations, etc., having official dealings with him.
Do not accept any offer of the cost of passage to foreign countries or hospitality by way
of free board and lodging there, if such offers are from foreign firms contracting with
Government.
28
29. Do not accept invitations for him or members of his family for free inaugural flights
offered by Air India, Indian Airlines Corporation or Foreign Airliners.
Do not give or take or abet giving or taking of dowry of demand any dowry directly
or indirectly from the parent or guardian of a bride or bridegroom.
Do not engage directly or indirectly in any trade or business without previous sanction of
the Government.
Do not speculate in any stock, share or other instrument
Do not negotiate for, or undertake, any other employment without previous sanction of
the Government.
Do not hold an elective office, or canvass for a candidate or candidates for an elective
office, in any body, whether incorporated or not without previous sanction of the
Government.
Do not engage himself in canvassing business of Life Insurance Agency, Commission
Agency or Advertising Agency owned or managed by the members of his family without
previous sanction of the Government.
Do not take part except in the discharge of his official duties, in the registration,
promotion or management of any Bank or other company registered or required to be
registered, under the Companies Act, 1956 (1 of 1956), or any other law for the time
being in force, or of any co-operative society for commercial purposes without previous
sanction of the Government.
Do not participate or associate himself with media programmes without previous sanction
of the Government.
29
30. Do not lend money to or borrow money from or deposit money as a member or agent,
with any person, firm or private company with whom he is likely to have official
dealings. Do not otherwise place himself under pecuniary obligation with such person,
firm or private company.
Do not approach his subordinates for standing surety for loans taken from private sources
either by him/his relations/friends.
Do not undertake private consultancy work.
Do not purchase shares out of the quota reserved for friends and associates of Directors
of Companies.
Do not put his position or influence directly or indirectly to secure employment for any
member of his family in any company or firm.
Do not bid any auction of property where such auction is arranged by his own officers.
Do not stay as guest with Foreign Diplomats or foreign nationals in India.
Do not invite any Foreign Diplomat to stay with him as his guest in India.
Do not accept or permit his wife or dependents to accept passage money or free air
transport from a Foreign Mission/Government or Organisation.
Do not bring any political influence in matters pertaining to his service.
Do not consume any intoxicating drinks or drugs while on duty.
Do not appear in public place in a state of intoxication.
Do not indulge in any act of sexual harassment of any woman at her work place.
30
31. Do not enter into, or contract, a marriage with any person if the Government Servant is
having a spouse living, without the permission from Government.
Do not employ children below 14 years of age.
Do not accept award of monetary benefits instituted by Private Trusts/Foundations, etc.
3.6.3
Acceptance of Gifts :
Government servants should not accept any gift from any foreign firm or any person who
is having official dealings with the employee. Gifts accepted from near relatives or
personal friends whose value exceeds the permissible limits (Rs.7000/Group „A‟;
Rs.4000/Group „B‟; Rs.2000/Group „C‟; Rs.1000/Group „D‟) should be intimated to
Government. In other cases, gifts can be accepted only after prior permission of the
Government. Gift includes free transport, boarding, lodging or any other service or
pecuniary advantage.
3.6.4
Acquisition/Disposal of Properties :
Every Government servant shall on his first appointment submit a return of his assets and
liabilities giving full particulars as prescribed in Rule 18(1)(i) of CCS Conduct Rules,
1964.
Immovable Properties: Immovable properties can be acquired or disposed of by a Govt.
servant in his own name or in the name of any of his family members only after prior
31
32. intimation to the Govt. Any such transaction with a person having official dealings
should be made only with the previous sanction of the Govt.
Every Government servant belonging to Group „A‟ & „B‟ services shall submit an
Annual Immovable Property Return, in the prescribed format, in respect of the previous
year before 31st January of the following year.
Movable Properties: Any transaction of movable property by the Govt. servant either in
his own name or in the name of any member of his family should be reported to the Govt.
in case the value of such a property exceeds two months‟ basic pay of the Govt. Servant.
Any such transaction with a person having official dealings should be made only with the
previous sanction of the Govt.
3.6.5
Subletting and vacation of Government accommodation :
Do not sublet, lease or otherwise allow occupation by any other person of Government
accommodation which has been allotted to you.
Vacate the Government accommodation within the time-limit prescribed by the allotting
authority after the cancellation of your allotment of Government accommodation.
32
33. 3.7
Roles and Responsibilities of Executives :-
3.7.1
Chairman :
As per the Rules and Regulations of the Food Corporations Act 1964, the Chairman is
the chairman of the Board of Directors of the Corporation and the Executive
committee. The role and function of the Chairman has not been specified in the Act.
However, Chairman, as Head of the organisation foresees the future of the
Corporation and with his seniority and experience is expected to:-
i.
Guide the Board of Directors in formulating and implementation of policies
relating to procurement, storage, movement, transport, distribution, sale of food
grains and laying down the objectives and targets thereof.
ii.
Interact with Central Government on formulation of policy issues relating to FCI
functions and operation
iii.
Establish and maintain close liaison with Central and State Government at level(s)
for promoting and protecting the interests of the Corporation.
3.7.2
Managing Director :
As per the Rules and Regulations of the Food Corporations Act, 1964, the Managing
Director shall exercise such powers and perform such duties as the Board of Directors
may entrust or delegate to him. The Managing Director is expected to implement the
vision as laid down by the Board of Directors. It is further expected that this
33
34. implementation would inter-alia be in consonance with the socio-political and
economical environment in the country.
As Chief Executive of the Corporation and member of its Board of Directors and
Executive committee, he is expected to :
1.Establish operational objectives, plans and policies relating to the role of FCI including
procurement, distribution, movement, storage, etc. and to ensure that the various
operations of the Corporation are run efficiently and economically.
2.Develop and administer policies and programmes of the Corporation in accordance
with the guidelines laid down by the Government of India, Board of Directors and Food
Corporations Act and the Rules and Regulations thereof.
3.Ensure that the Executives of the Corporation, down the line are keyed up to the need
of the hour, remain motivated; largely concentrate on policy and procedures, i.e., focus
on FCI and not files.
3.7.3
Executive Director :
An Executive Director who may be in charge of one or more number of divisions
under his control must focus primarily on FCI and not on files. With his years of
experience and skill developed within the organisation, he remains the most crucial
policy advisor. He is expected to assist the Managing Director in implementing the vision
as laid down by the Board of Directors. Only he can, with his experience, take FCI
34
35. forward, broaden the scope of its activities, monitor the field level functioning and ensure
that FCIs image and efficiency at least vis--vis his sector remains at the peak. He is
virtually the MD of his division(s) and is expected to not only work but appear as such.
For the above purpose, he is expected to ensure that the reports/specific data being
received in his division(s) from other divisions or from field offices is complete and
meaningful and is analyzed, compared and contrasted with past data zone-wise by his
office to reflect the quality of work in the field level. The input from his office as
collected from field offices would have to be tempered at his level by his interaction with
other divisions, trade and field inspections, keeping in view the overall economic, social
and political environment of the country. The width and depth of his vision will
distinguish him from his subordinates and colleagues :
i.
The Executive Director (Personnel) for example is expected to constantly monitor
and analyze the strength and weaknesses of the Zones, requirement of staff and
their proper deployment keeping in view the turnover and other activities of the
Zone and how much can be outsourced.
ii.
The Executive Director (commercial) is expected broadly to be aware of the
trends of imports, exports worldwide and is expected to suggest commercially
sustainable new schemes for the Corporation to supplement its activities.
iii.
The Executive Director (Vigilance) is expected to be vigilant and watchful and to
take such steps which reduce the possibility of theft.
35
36. iv.
The Executive Director (Traffic) is broadly expected not only to think of reducing
our hassles with the Railways but also think of other modes of transportation to
reach food grains to the people.
v.
The Executive Director (Training) is expected to draw training plan in such a
manner so that each officer gets exposed on regular basis to the latest and most
relevant in the field for better discharge of functions.
vi.
The Executive Director (Engineering) is expected to advice on the modernization
and mechanization inter alia of railway sidings, silos, weigh bridges and others.
He should be constantly in touch with the agencies engaged in modernization and
mechanization.
vii.
Executive Director (Finance) is expected to advise the Corporation on cost cutting
measures, new instruments and suggest steps to reduce hassles for staff and
officers in the matter of pension payment, clearance of medical bills, etc.
viii.
Executive Director Incharge of Procurement should come out on how to make the
decentralized procurement policy more successful and how the FCI can increase
its procurement in non-procurement areas. He is also expected to interact with the
Department of Agriculture and such other departments as are connected with his
work.
36
37. The efficacy of an Executive Director would be evident in the confidence the trade,
business, Ministry and various bodies have in his knowledge and decision taking
capacity. It would be an ineffective Executive Director who would prefer to pass on the
buck to the field officers or Managing Director/Chairman or recommend forwarding the
matter to Government. Unorthodox and quick decisions would distinguish one E.D. from
the other. The above brief description of expectation from the Executive Directors is only
as an example to indicate that FCI is not expected to tread the beaten path and can only
grow with advice of Executive Directors.
3.7.4
i.
Secretary :
The Secretary of the Corporation would perform all acts and functions as are
required under the Food Corporations Act, 1964 related to the meetings of the
Board of Directors, Executive committee (EC) and other Committees of the
Board. He is expected to :
a. Keep subject wise records of the decision of the Board/EC to ensure
consistency in decision making.
b. Carefully scrutinize the proposals coming to the Board of Directors to
ensure that the Board has full background and facts before it takes a
decision.
c. Keep subject wise record of the Ministry related Parliament Questions,
debates, etc. to ensure consistency in replies and trend of debates on
FCI and related departments.
37
38. ii.
In so far as VIP references and Parliament Question are concerned, he will :
a. Ensure expeditious response
b. Analyse the nature of references to advise the management on possible
corrective measures.
iii.
The underlying tone of the work of the Secretary is that he is not merely a robot,
stapling papers together or ensuring that these reach Directors in time. The thrust
is on application of mind.
3.7.5
i.
ED (Zones)/GM (Regions) :
A proper image and effective functioning of FCI vis-a-vis the States, Traders,
Millers and exporters is absolutely and exclusively and fully dependent on the
actions, directions and the motivation the ED (ZONE) and GM (REGION)
provide to their field officers. Inevitably, therefore, the ED (ZONE) and GM
(REGION) are expected to maintain close liaison with and assist the State
Government(s) and the HQs at the highest level for promoting and safeguarding
the interests of the farmer, consumer, trader and the Corporation.
ii.
If FCI has to bolster its functioning and image as a proactive organisation, the ED
(ZONE) & GM (REGION) are expected to take day to day decisions in its
policies of procurement, movement, storage, etc. Flexibility would be the key
operational word here; exercise of discretion will be strong point. To illustrate
what they can do: This year i.e.2004-05 by enhanced procurement of paddy and
38
39. rice in Bihar, Orissa and West Bengal, the FCI would have to move at least 60-70
rakes less per month to these regions. Further, MP and UP are more or less selfsufficient in wheat and rice. All the same, FCI has been lately sending nearly 150
rakes of food grains per month to each of these States for meeting their deficit. It
has been agreed by the State Govt. and even the GM (REGION) that if the State
makes a little effort with the help of the FCI, they can easily enhance their
procurement, thereby saving carrying cost, storage losses and unwarranted
criticism. The only two officers who can really suggest policy and procedural
changes in the food grains management are the GM (REGION) and the ED
(ZONE) These examples show also how the FCI can strengthen its role as Food
Adviser to the State Governments.
iii.
The ED (ZONE)/GM (REGION) is expected to keep his knowledge updated
about agricultural production and related matters within his jurisdiction and
constantly analyze procurement, storage, preservation and movement aspects for
the most cost effective functioning. The above would naturally and inevitably be
based on his interaction with the State officials, trade, press, academic institutions
and FCIs experienced field staff.
iv.
All the divisions of the corporation in the Zone/Region would work under him.
The ED (ZONE)/ GM (REGION) is expected to exhibit effective superintendence
and control on the field staff through inspections and interactions with the public
and trade. Their effectiveness, grip and respect would depend on their preparing
and using the returns such as MPR/QPR, etc. It is expected that these returns
would be prepared directly under their supervision.
39
40. v.
The effectiveness of the ED (ZONE)/ GM (REGION) would also be evident from
the number of references/individual cases of decision making being received at
the HQs from his area. He must ensure that as far as possible the work of the
Corporation whether it relates to procurement, preservation of stocks or
engineering, etc. are to be outsourced. The grip that ED (ZONE)/ GM
(REGION) would have on his work and what he can contribute will be dependent
largely on the number of inspections and corrective measures taken thereafter.
vi.
The ED (ZONE)/GM (REGION) is expected to analyze the strength and
weaknesses, opportunities and threats of the Zone/Region, requirement of staff
and their proper deployment keeping in view the turnover and other operations
and the activities that can be outsourced.
3.7.6
General Manager/Deputy General Manager/Assistant General
Manager :
i.
General Manager/DGM/AGM posted either in the field office or at the HQs is an
important cog in the wheel that enables his superiors to make their decision by the
inputs that he provides. He is essentially an input provider and therefore must
very meticulously apprise himself of facts, figures, precedents, etc. related to his
division. The above level officer at HQs/Zonal/Regional level is expected to
update himself with the statistics and reports being received from field offices or
otherwise and must know even the most micro level details of the work of his
division.
40
41. ii.
Based on the above information, they are expected to analyze the strength and
weaknesses of their work in the Zone, in the Regional Office or at the District
Level. These officers are expected to point out whether the areas under their
jurisdiction are lax in dealing with Vigilance cases, stock disposal, legal cases, out
of court settlement, inventory control, etc.
iii.
To reiterate their most important role, these officers are expected to not merely
collect statistics, but with their seniority, experience and skill, analyze and put up
to their seniors as to the state of affairs in the various zones, regions and districts.
iv.
These officers are expected to ensure proper maintenance of all records and
documents related to their divisions. They are expected to ensure that data
information received is properly entered in the computers in a planned manner so
that future retrieval is possible and easy.
v.
Principal, Institute of food grains Management, who is in the rank of Manager is
expected to direct, manage and control the activities of the Institute. He organizes,
administers and conducts programmes for the purpose of orientation and training
regarding organisations policy and routine, and instructions in Business method
relating to general management, finance, accounts, quality control, engineering
shipping, movement, storage and contract work, etc. He is to ensure that each
officer gets exposed on regular basis to the latest and most relevant in the field for
better discharge of their functions.
vi.
He is expected to confer with management and field officers to determine the
requirements and needs to chalk out the programmes accordingly. Updates
41
42. manuals, organizes lectures, management games, visual aids, reference library,
case studies, etc. for imparting training.
vii.
Coordinates programmes through meeting with faculties and the trainees, and
reviews faculties activities and evaluates effectiveness of the training programmes
by feedback.
viii.
ix.
The Institute will act as an adviser through FCI to the Ministry of CAF&PD.
It is expected that the Institute will advise, guide and regulate the activities of the
Zonal Training Institutes.
3.7.7
i.
Area Manager :
The Area Manager is the face of FCI for the State govt. authorities, the trader, the
exporters and the labour. Keeping the aforesaid role and importance in mind, he is
expected to identify all the actions and precautions that are necessary for being a
good Store Keeper and a good Courier. Many instructions have been issued for
proper maintenance of depots and account keeping, informing the non-officials
and the District authorities about the stock position, etc. of the depot ensuring that
the revenue authorities visit depots in the normal course of their inspections in the
area. The Area Manager is expected to study these instructions and comply with
them carefully. The officers at the district level and depot level are expected to
ensure that their subordinate staff is also accessible, helpful and resourceful.
42
43. ii.
Considerable loss has been caused to the Corporation by the Area Managers not
being careful of FIFO principle and has only kept in view the disposal of the grain
kept in FCI depots. The entire staff in the district and the depots must be fully
conversant with provisions of various manuals and periodicity of returns. More
important is close follow up of all changes in data. He would not merely act as a
collector of statistics but must analyze the figures/data (MPR/QPR) to check
whether and why the operational cost is increasing, whether there is any excessive
off take of stocks in comparison to number of beneficiaries, trend of procurement
volumes, the prospects of procurement in the next crop season, procedural
bottlenecks resulting in legal or vigilance cases; efforts for out of court settlement,
trend of losses, etc.
iii.
He would coordinate the activities of the various sections, i.e., QC, Engineering,
Movement, Labour, Finance, Accounts, IA & PV inter depot/mandi, etc. to
achieve the desired results. He must know the micro level details of the work he
handles to have an edge over the depot staff and command their respect.
iv.
His effectiveness would be further judged among other things with the delivery of
the maximum stocks ex-rail head to the State Governments. This can be done by
understanding and explaining the economics of such operations. This would
initially require a high degree of coordination and interaction with the State
authorities, providing them advance information so that they can arrange
43
44. transport, etc. and thus persuading them to make advance planning of location of
the food grains in the state godowns.
v.
He must exercise his delegated powers to manage the affairs of his district
without referring matters to lower or higher levels and he would be absolutely
responsible for the inactions or delayed actions and for the acts of his
subordinates.
3.7.8
i.
Manager :
He functions as a front line Manager in various cadres. He must, therefore,
apprise himself of the job contents, manual provisions, procedures, policy of
FCI/Government of India, periodicity of prescribed returns/reports to be received
from field offices or to be submitted to higher authorities in relation to his
assigned work in the offices or depots.
ii.
He would allocate work to his subordinates and act as their guide and mentor for
proper coordination of the work and frequently check registers and records and
should be aware of the micro level details of work he handles.
iii.
He must submit files to the superiors with meticulous scrutiny of data, rule
position, precedents, and facts and apply his mind for alternatives, etc. in the
overall interest of FCI to help his superiors in decision making.
44
45. iv.
He would maximize the use of computers in his daily work.
v.
He would not merely act as statistics collector but would monitor as well to
ensure disposal of cases related to his area of work. To illustrate it, Assistant
Manager (Legal) would monitor the legal cases and analyze the nature of cases
and make efforts for withdrawal of cases for out of court settlements, filling
applications for expediting the cases, etc.
vi.
While posted in a depot he would
a. Function as a good Store Keeper and take all precautions and actions to
maintain the stocks in coordination with QC/Engineering/Labour, etc. and
would also prioritize the issue of stocks for various schemes, i.e.,
TPDS/OWS/SGRY, etc.
b. Maximize the delivery of stocks ex. Rail head to State Governments to
avoid double handling and to reduce losses.
c. Interact with Agricultural Universities/Institutions/Government authorities
to seek guidance in related work. He must conduct frequent inspections
and bring out discrepancies, pitfalls, high trend of losses, deterioration of
stocks, etc. in the knowledge of his superiors indicating remedial measures
taken by him.
d. Be responsible for the performance of assignments he handles in office or
in field.
45
46. 3.8
3.8.1
Handling of Cash :-
Requirement for Taking Short Term Loan :
Keeping in view the periodic increase rate of interest by the consortium of the Banks as
well as to raise additional resources to meet the requirement of funds at the time to Peak
procurement, the corporation is taking steps for availing alternative sources of finance
through Short Term Loan to achieve the twin objective of reduction in interest cost and
improving the liquidity.
As per stated above there are few ways to get the funds-like STL, BONDS, etc.
Through this project, we come to know, how to raise funds through short term loans?
What is the procedure and the criteria and from whom they take the permission?
Table No.-6
46
47. 3.8.2
Financial Features :
Average Bank Borrowing during 2007-08
Rs.27327 Crores
(Consortium of 65 Banks as on 31.3.08)
Commercial Borrowing (Bonds)
Rs.8605 Crores
Rate of Interest on Bank Borrowing
10.15 % p.a.(Monthly Compounding)
w.e.f.01.03.2008
Rate of Interest on Bonds
7.31%p.a.(Annually Payable)
Table No.-7
3.8.3
Equity Released for Plan Schemes and Working Capital (as on
31.03.08) :
Rs. Cr.
Working
Construction of
IISFM
Capital
Godowns
Project
Upto 2002-03
1484.00
855.11
2003-04
Nil
2004-05
Nil
Year
Other Schemes
Total
Nil
13.89
2353.00
23.96
15.50
Nil
39.46
5.87
39.14
Nil
45.01
47
50. 2006-07(Prov.)
Prov. Estimates
1214.39
1411.60
2007-08(RE)
Rev. Estimates
1348.69
1571.36
2008-09(BE)
Budget Estimates
1458.83
1698.90
Table No.-10
(c)
Food Subsidy Released to FCI and Incurred by FCI (Rs. Cr.) :
Food subsidy released to FCI
Food Subsidy Incurred by FCI
Against
Subsidy Incurred
during the year
Year
Total
Earlier
Status of
Accounts
For the Year
years
2001-02
16274.00
.
16274.00
18005.00
Audited
2002-03
22673.72
.
22673.72
25322.00
Audited
2003-04
23474.04
4545.86
18928.18
21587.00
Audited
2004-05
23280.00
4090.39
19189.61
20773.00
Audited
2005-06
19871.00
473.32
19397.68
21344.00
UnAudited
50
52. (c)
Maintain buffer stocks as a measure of food security not only to
impart inter-seasonal stability but also to meet the emergent
situations arising out of crops failure due to drought, floods, etc.
3.9.2
Working Capital :
To achieve the above objectives, the Corporation undertakes procurement, storage,
movement and distribution of Central Pool stocks on a massive scale. The working
capital required for these gigantic operations is provided by a consortium of banks
constituted by RBI under the leadership of SBI. The quantum of working capital
requirement for the ensuing Rabi food grains operations has been projected keeping in
view the policies of the Govt. announced from time to time. The gross out flow of funds
for this purpose is estimated at Rs.46400.15 crores against inflows of Rs.54509.76 crores
during April, 2010 to September, 2010.The details are given in the following paragraphs.
The Govt. of India has issued a single default guarantee of Rs.34495 crores (enhanced
from Rs.33100 crores) to SBI w.e.f.07.05.2007 and valid up to 31.03.2008, the validity of
the guarantee was subsequently extended upto 31.03.2012 vide Govt. of India‟s letter
No.5-4/2007/SC-II dated 23.02.2010 covering the entire food credit of the Corporation.
The State Bank of India authorizes the monthly drawing power of the Corporation
equivalent to value of stock. For borrowing beyond the value of stock SBI levies penal
interest @0.5% on the amount of excess borrowing.
52
53. 3.9.3
Current Cash Credit Utilisation :
The monthly Credit limit/ drawing power used to be authorized to the Food Corporation
of India by the Reserve Bank of India upto April, 2005.Thereafter RBI stopped
authorizing the credit limit, subsequently the Reserve Bank of India vide letter dated
2.09.05 has informed that henceforth State bank of India will take care of the credit
requirements of the Corporation. Thereafter the State Bank of India started authorizing
monthly Credit limit/ drawing power of the Corporation based on the value of stock. The
drawing power was fixed by SBI at Rs.17966.91 crores for the month of February,
2010.The Cash Credit Utilization at the end of March, 2010 is estimated at Rs.24616.61
crores.
3.9.4
Procurement/Takeover of Wheat :
The table below shows market arrivals and procurement of wheat for Central Pool
including under de-centralized system during the last five years.
Qty. Lakh Tones
YEAR
MARKET
PROCUREMENT
ARRIVALS
FOR
CENTRAL POOL
QTY.
QTY.
Rabi 2004-05
181
168
Rabi 2005-06
158
148
Rabi 2006-07
137
92
53
54. Rabi 2007-08
154
111
Rabi 2008-09
244
227
Rabi 2009-10
269
254
Table No.-12
3.9.5
Revenue Expenses :
Revenue expenses for the six month period have been assumed at Rs5304 crores based
on the FCI's budget estimate for 2010-2011.
3.9.6 Interest on Bank Borrowings :
The interest provision for food credit has been considered at current rate of 10.25% at
monthly rest.
3.9.7
Food Subsidy :
The food subsidy to the extent of Rs26000.00 crores is estimated as receivable during
the first six months' period of the financial year 2010-11.An advance of Rs.10,000/- crores
,as per comments of Ministry of Finance , at an average interest rate for 364 days T Bills
could be provided from 2010-11 and adjustment during the financial year itself against the
provisions made in the Budget 2010-11 for Food subsidy.
54
55. 3.9.8 Stocks :
The estimated value of stocks at acquisition cost as on 1st April 2010 vis-a-vis actual
as on 1st April'2009 is as under :Qty. (In Lakh Tones)
Value: Rs. Crores
As on 1.4.2009
As on 1.4.2010
Qty.
Qty.
Value
Value
Wheat
66.27
7714.76
75.31
9347.78
Rice
134.12
20099.36
154.43
25715.37
Total
200.39
27814.12
229.74
35063.15
Table No.-13
3.9.9
Gross Outflow :
The estimated fund requirement for food grains operations from 01.04.2009 to
30.09.2009 is as follows :Total
For Quarter ending
(Rs.Crores)
4/2010
to 9/2010
April-10
June-10
I) For purchase of Wheat
to July
10
Sept.10
19994.70
14927.57
5067.13
10948.81
6953.08
3995.73
including takeover from State
Agencies.
II) For procurement of Levy
55
to
56. Rice including Paddy and CMR
takeover from State Agencies.
III) For meeting the revenue
5304.00
2652.00
2652.00
IV) Interest on bank borrowing
858.16
463.64
394.52
V) Interest on Bonds
70.11
70.11
0.00
VI)Interest on short term loan
90.00
45.00
45.00
6900.00
3900.00
3000.00
1257.87
465.81
792.06
976.50
976.50
0.00
46400.15
30453.71
15946.44
expenses other than the bank
interest
VII)Repayment of short term
loan
VIII) Carryover Charges of
Wheat
IX)Repayment of Bonds
Total
Table No.-14
56
57. 3.9.10
Gross Inflow :
Rs.Crores
Particulars
Total
For Quarter ending
April-Sept.2010
April
2010- July
June 2010
Sale
2010-
Sept.2010
Food
11609.76
5785.26
5824.50
from
of
26000.00
13000.00
13000.00
10000.00
10000.00
0.00
6900.00
3900.00
3000.00
54509.76
32685.26
21824.50
grain
Subsidy
GOI
Annexure-VII
Addl.
Subsidy
from GOI
Receipts
from
STL
Total
Table No.-15
57
58. 3.9.11 Net Fund Flow :
The bank overdraft is estimated at Rs.24616.61 crores as on 31st March 2010 after
adding interest for the month ending March 2010.Month-wise estimated fund flow
during the period ending six months April/September 2010 is given below :
CCash Credit at Drawings
Month/Y the
ear
beginning During
of the month
R Rs.Crore
RReceipts
during Month
the the month
Month
Rs.Crore
projected
end
cash
credit utilization
RRs.Crore
R Rs.Crore
Apr, 10
24616.61
14566.83
126730.83
12452.61
NMay,10
12452.61
9089.47
6106.75
18559.37
DJun, 10
18559.37
6797.42
3825.69
22385.06
,JJul, 10
22385.06
5898.10
15945.23
12337.92
AAug,10
12337.92
5322.85
3060.66
14600.12
Sep,10
14600.12
4725.49
2818.61
16507.00
Table No.-16
58
59. 3.9.12
Cash Credit Limits Required :
As per the estimates given in foregoing paras the operating cash credit limit required
from April 2010 onward would be as under :Rs.Crores
Month
CC
Limit
proposed
4/2010
12452.61
5/2010
18559.37
6/2010
22385.06
7/2010
12337.92
8/2010
14600.12
9/2010
16507.00
Table No.-17
The cash credit limits indicated above may be considered by the State Bank of India
for sanction for Rabi, 2009 subject to usual review on monthly basis.
59
60. 3.10
Cash Flow (Kharif) :-
3.10.1
Introduction :
The Food Corporation of India has been set up under an Act of Parliament
primarily :a.
to provide price support to farmers so that they get remunerative prices
for their produce,
b.
to make available food grains at reasonable price to consumers,
particularly to the vulnerable sections of the Society, and,
c.
to maintain buffer stocks as a measure of food security not only to
impart inter seasonal stability but also to meet the emergent situations
arising out of crops failure due to drought, floods, etc.
3.10.2
Working Capital :
To achieve these objectives, the Corporation undertakes procurement, storage,
movement and distribution of food grains on a massive scale. The requirement of
working capital for these gigantic operations is met by the consortium of banks led by
SBI under the directions of the Reserve Bank of India. The quantum of working
capital requirement for the ensuing Kharif food grains operations has been projected
keeping in view the policies of the Government announced from time to time. The
60
61. gross outflow of funds for this purpose is estimated at Rs.56169 crores against
inflows of Rs.32854 crores during October, 2009 to March, 2010.
The Govt. of India has issued a single default guarantee of Rs.34495 crores
(enhanced from Rs.33100 crore) to SBI w.e.f.07.05.2007 and valid up to 31.03.10
covering the entire food credit of the Corporation. The State Bank of India is however
still fixing the drawing power of the Corporation equivalent to value of stock , which
is resulting in charging of penal interest on drawing in excess of stock value inspite of
the full security being available in the form of Govt. guarantee.
3.10.3
Current Cash Credit Utilisation :
The Cash Credit limit authorized to the Food Corporation of India by the Reserve
Bank of India was Rs.30348 crores (up to April, 2005).The Reserve Bank of India
vide its letter dated 2.09.05 has informed that henceforth State bank of India will take
care of the credit requirements of the Corporation. Accordingly, the State Bank of
India has authorized the Cash Credit Limit of Rs.18972.40 crores for the month of
August, 2009.The actual Cash Credit Utilization at the end of August, 2009 at
Rs.16902.75 crores.
3.10.4
Revenue Expenses :
The revenue expenses for the six months period have been projected at
Rs.3972.00 crores.
61
62. 3.10.5
Interest :
The interest on bank borrowings has been considered at 10.25% up to the value of
projected stock to be held by the Corporation for the period Oct.09 to March, 10.
3.10.6
Off take :
The issue of Wheat and Rice has been projected at 63.91 lakh tones and 109.93
lakh tones respectively during the period Oct.09 to March 2010.
3.10.7
Food Subsidy :
The Food Subsidy to the extent of Rs.17719 crores receivable during the next six
months period has been considered.
3.10.8
Stocks :
The stock with FCI as on 31.3.2010 and the value thereof at average acquisition
cost is estimated as Under :
Qty.-Lakh Tones
Rate-Rs.per Qtls
Amount-Rs.Crore
62
63. Commodity
Qty.
Rate
Amount
96.13
1237.60 11897.05
Rice
185.80
1640.38 18410.42
Total
281.93
30307.47
Wheat
Table No.-18
The month end stock levels of wheat and rice from October, 2008 to September,
2009 and the expected stock level during the period from 1.10.2009 to 31.3.2010.
3.10.9
Gross Outflow :
The estimated gross fund requirement for food grains operations from 1.10.2009
to 31.3.2010 will be as follows :Amount Rs.Crore
Sl.
Particulars
Total Oct.2009
Procurement
ending March
2010
Takeover of wheat
2.
ending
Dec.2009
1.
Quarter
March 2010
No.
Quarter
of
7164.00
Rice
3682.00
3482.00
30178.00
10498.00
19680.00
(including Paddy, Levy
and
Custom
Milled
Rice)
63
64. 3.
For meeting revenue
3972.00
1986.00
1986.00
521.00
196.00
325.00
9450.00
6450.00
3000.00
expenses other than
Bank Interest
4
Carry over charges on
Wheat
5
Re-Payment of Short
Term Loan
6
Repayment of Bonds
3100.00
0.00
3100.00
7.
Interest on Bank
1090.00
361.00
729.00
559.00
272.00
287.00
135.00
90.00
45.00
56169.00
23535.00
32634.00
Borrowings
8
Interest payable on
Bonds
9
Interest payable on Short
Term Loan
TOTAL
Table No.-19
64
65. 3.10.10
Gross Inflow :
Amount Rs.Crore
Sl. No.
Particulars
Total 1.10.2009
Quarter ending Quarter
to 31.3.2010
December 2009 ending March
2010
1.
Sale of Food grains
9135.00
4177.00
4958.00
2.
Subsidy from Govt. of
17719.00
12327.00
5392.00
6000.00
3000.00
3000.00
32854.00
19504.00
13350.00
India
3.
Receipt from Short
Term Loan
TOTAL
Table No.-20
65
66. 3.10.11
Net Fund Flow :
The Bank borrowing is Rs.15741 crores as on 1.10.2009 (after adding interest for
the month ending Sept., 2009).Month-wise estimate of fund flow during the period
October, 2009 to March, 2010 is given below :Amount Rs.Crore
Month
Cash Credit at the
Drawings
Receipts
Month end
beginning
during the
during the cash credit
month
month
Oct.2009
15741
6629
11710
10660
Nov.2009
10660
5673
2366
13967
Dec.2009
13967
11231
5428
19770
Jan.2010
19770
11462
8032
23200
Feb.2010
23200
12505
2621
33084
Mar.2010
33084
8669
2697
39056
Table No.-21
66
67. 3.10.12
Cash Credit Limits Required :
As per estimate given in the foregoing paragraphs, the cash credit limit required
from October, 2009 onward would be as under :
Amount Rs.Crore
Month
CC Limit
Oct.2009
10660
Nov.2009
13967
Dec.2009
19770
Jan.2010
23200
Feb.2010
33084
Mar.2010
39056
Table No.-22
67
68. 3.11
Profitability :-
The measurement of profitability is a tool of overall measurement of efficiency an
overall study profitability of FCI has been Dade in relation to sales operating assets
capital employed and its net worth.
By analysis the working result, i.e., Profit and loss account of FCI. It was found that
the net profit before interest and tax of the FCI is showing increasing trends. This is
very good for FCI. The increase in the profits is nearly 24% more than previous year
the reason is good sales growth between years. For this, the following suggestion
should be considered :Proper cost control is required and cost control technique should be adopted for
it.
Operating expenses, admn. expenses should be specially considered to be
reduced.
Inventory is the biggest items of balance sheet that must have demanded a
large amount of maintaining cost. So efficient inventory management should
be done. Inventory should be reduced extent that would help to recover
blocking money in inventory.
The service staff should be given proper training and better environment for
work.
Proper advertisement and sales promotion is required.
Dairy has to pay large fix interest charged. Hence, long term borrowing should
be reduced so that the earning are satisfactorily earmarked with them.
68
70. 4.1
Review of Literature :-
4.1.1
(Sprague, Carolyn)
Topic - Cash Flow
Source - Research Starters Business, 2008
This essay covers important topics related to the management of cash flow within
companies. Cash is defined as currency in corporate accounts, short term investments
or commercial paper that's easily convertible to cash. A steady cash flow enables a
business to pay its employees and vendors and to invest in new projects and
opportunities. Companies face many risks associated with running out of cash;
without a ready supply of cash, businesses cannot replay loans, provide goods and
services to customers or invest in future growth opportunities. Businesses are required
to file a statement of cash flow as outlined by the Financial Accounting Standard's
Board Statement of Cash Flow (FASB statement 95). Trends in cash management are
evolving to meet the opportunities offered by global markets and to mitigate risks
associated with cash shortfalls. Emerging topics in cash management include more
active methods of forecasting company cash flow. Other factors that will impact cash
management forecasting include: Improved technology, centralization of corporate
forecasting, tighter regulatory controls, and new statistical techniques for cash flow
analysis.
70
71. 4.1.2
(Rosett, Joshua)
Topic - Labour leverage, equity risk and corporate policy choice
Source - European Accounting Review, Dec 2003
This paper investigates the role of labour utilization in assessing equity investment
risk and corporate financial policy choices. Several existing models of the firm predict
that labour utilization is costly to adjust in the short run. I argue that this leads to a
relatively fixed obligation to pay cash to labour, in effect creating an off-balancesheet intangible liability similar to a lease. The liability creates 'labour-leverage' risk,
analogous to financial leverage risk. Labour leverage is hypothesized to be positively
correlated with equity investment risk as measured by characteristics of stock returns.
Managers recognize this risk and adjust financial policies including debt financing
and dividend policy accordingly. The main empirical results are that labour leverage
is positively correlated with equity investment risk, and it plays the predicted role in
regressions
explaining
financial
structure
and
dividend
policy.
Proxies
for labour leverage are simple measures based on existing disclosure. The results are
consistent with the conjectures that market participants use labour disclosures to
assess risk, and that managers take actions to mitigate this risk. The results are
consistent across most sectors of the economy and consistent over time.
71
72. 4.1.3
(Gowler, Dan)
Topic - Determinants of the Supply of Labour to the Firm
Source - Journal of Management Studies, Feb 69
The article refers to research on the economic aspects of manpower planning and
focuses on factors that affect the demand for labour and the labour supply. The
manufacturing industry provides an example where the wage payment system,
opportunity for upward job mobility, and varying amounts of overtime produced more
absenteeism and labour turnover. A model of a self-perpetuating manpower problem
includes competition in the labour market and rapid change in the product market
requirements. Wage disparity, inflation of wages by overtime, imbalance of the effortreward relation, employees' expectations for higher levels of earnings, and the
perceived instability of the wage packet are mentioned.
4.1.4
(Brown, A. J.)
Topic – Further Analysis of the Supply of Labour to the Firm
Source – Journal of Management Studies, Oct 71
The article focuses on labour supplies for organizations. It states that there is a need
for a predictive theory of labour supply and demand for individual organizations in
order to solve problems such as labour turnover, wage and productivity drift, and
unofficial strikes. It comments that newspaper descriptions of these problems rarely
contain elements needed to predict particular cases or the generalization of particular
processes. It mentions that labour theory proceeds from two perspectives, economic
72
73. theory and institutional analysis, and that neither can give practical insights into
labour issues faced by organizations.
4.2
Establishment of FCI :-
The Great Bengal Famine of 1943- the worst in the history of India weaked havoc.
There was no buffer stocks of grain, no coordinating body to execute the emergency
plans and thousands of people perished. Four years later at the stroke of mid night of
August 15 1947, India became a free country. Independence was accompanied with
the gigantic task of feeding millions of the second most populous country in the
world. Then government pledged to win the war against hunger.
A massive national effort to attain self- sufficient through the use of high yielding
varieties coupled with scientific farming opened doors to a Green Revolution. To
equip the country with all the important food security, it was necessary not only to
provide an impetus to farmers to grow more crops through the use of seeds and inputs
such as fertilizers, irrigation, pesticides, modern agriculture implements but also
provide a price assurance system.
Thus was born the Food Corporation of India in 1965 as the public sector marketing
agency to provide the link between producers and consumers. It was intended to
secure for the government a commanding position in the food grain trade. By 1979
FCI was operating in all the states as a sole agent of central government in food grain
procurement. In its years of service to the nation, FCI has played significant role in
India‟s success in transforming the crisis management oriented food economy into a
stable food security system.
73
74. 4.3
Working Experience in FCI :-
The working environment of FCI, Mayapuri Depot is quite supporting and
encouraging. Different departments seek to help each other whenever the need arises.
There is a strong bond between people and various departments existing over there.
People work together towards the attainment of mission of FCI and try to maintain the
supply of food grains effectively and efficiently.
4.4
Difference between Allocation and Lifting of Food Grains :-
Under certain programmes and yojnas there is a huge difference between
allocation and lifting of food grains like in TDPS, ST/ ST/ OBC Hostels & Welfare
Institutions and various others. Government should take necessary measures to
overcome this.
4.5
Liquidation of Lower Category Food Grains :-
The government of India, Ministry of CA, F & PD from 1997 onwards has
authorized FCI to liquidate both the surplus issuable stocks and non-issuable stocks
through tender/open sale.
The non- issuable to TDPS and surplus stocks of food grains and coarse grains
being liquidated as per the decisions taken by the High Level Committee of FCI
during its meeting from time to time.
Few rapid measures should be adopted so as to minimize the losses.
74
75. 4.6
Findings :The fund management of corporation is good. Corporation allocates its fund as
per government policies and norms.
There is a time gap between debtors and creditors. And it‟s a good health sign
for a corporation. Because a corporation can invest for short term and earn
return.
Firm made its payment through NEFT and RTGS by this a firm can made
payment quickly and there is no need of paper work.
As corporation uses JIT policy for inventory. That‟s why there is very less
chances for obsolescence of inventory.
4.7
Objective of study :-
Conceptual :
To gather the financial statements related to inflows and outflows of funds in Food
Corporation of India and to know how and where they are used.
Factual :
The present earning capacity or profitability of the FCI Ltd.
The short-term liquidity and long-term solvency.
The financial stability of the organisation.
By studying the relationship and understanding between top management and
low working class.
75
76. 4.8
Limitations :-
Following were some of the limitations faced during the training in completely
understanding the various processes & operations :
1. Insufficient information supplied by the corporation.
2. Conservativeness of the corporation.
3. Godowns & other storage locations are far away from the Head-Quarter,
making it difficult to collect all the necessary information regarding actual
procurement & storage status.
4. The staff of the department of finance was due to work over-load, too busy to
spend enough time, in helping in the preparation of the project.
5. In the corporation, there is top-level secrecy in matters concerned with
investment.
76
77. Conclusions and Recommendations :Financial analysis is the analysis of financial statements of an enterprise. Financial
statements reorganise collection of data according to logical and constituent
accounting procedures. However, financial statements in their traditional form giving
historical data and information are of little use to these who use them to draw certain
conclusion.
Financial appraisal is the scientific evaluation of profitability and financial strength
of any business concern. Financial appraisal techniques include ratio analysis,
common size analysis, trend analysis, fund flow analysis, etc. These techniques may
be applied in the financial appraisal of any entity and FCI Ltd. is no exception to it.
Finally, at last, I would like to say that the employment morals in FCI godowns is
around 60-70%. Basically, the organisation as a whole is satisfied with some of the
plans & schemes of the organisation. But there is a need of some changes in the
policies, so that the organisation grows further. The employees are not satisfied
because of the HR policies as there is no separate division of HR, since, the HR
division is the backbone of any organisation & implementations of the policies in
practice in different hierarchical levels which needs to be change with the change of
time. Overall, the employees are generally satisfied with the working condition in the
corporation.
77
78. References :-
I. M. Pandey, (1978), financial management, Ninth addition, UBS Publication
New Delhi.
Van
Horn,(2002),Financial Management and Policy,12th edition, Publisher
Dorling Kindersley India ltd.
Horne
Wwachonicz, J. R. Bhaduri (2005), Fundamentals and Financial
management, 12th edition, Pearson publisher.
MY Khan, P. K. Jain (1981), Financial Management,5th edition, Publisher Mc
graw hill companies.
Financial statement for the year ended 2007-08 as obtained from FCI
Annual-Report 2006-07 of FCI
Study module on financial management
Financial dailies.
Economic Times
Business Standard
Business Magazines
Business India
Business World
Internet Portals :
www.fciweb.nic.in
www.wikipedia.com
78
