Telangana can save money supplying boiled rice to Kerala rather than FCI

Telangana government considers supplying boiled rice to Kerala to ensure immediate disposal and faster payment.

The State government contemplates supplying boiled rice to Kerala to ensure that the produce is disposed of immediately apart from receiving cash inflows speedily.

Kerala, where certain varieties of boiled rice are sought after, wants a supply of at least two lakh tonnes of these varieties. The Telangana government too is keen on supplying these varieties to Kerala rather than the Food Corporation of India (FCI) that procures from the government here.

One of the reasons the Telangana government is keen on supplying boiled rice to Kerala is that it expects expeditious payment as the FCI has been delaying the payments after the procurement. The government is likely to put a condition to the Kerala government that the money should be paid within three months of the supply apart from providing some advance payment.

Officials revealed that Telangana has lost an amount to the tune of over ₹3,000 crore as interest due to the delayed payments from the FCI over the last few years. As per the present procedure, the FCI bears the cost of the grains and the procurement but it delays the payment sometimes running into a couple of years.

However, the Civil Supplies department has been paying money to the farmers immediately with loans raised from banks and other sources. The interest accrued over these loans due to delayed payments from the FCI is running into more than ₹3,000 crore.

This was revealed in the meeting of Minister for Civil Supplies N. Uttam Kumar Reddy with Kerala’s Minister for Food and Civil Supplies Minister G.R. Anil recently. Mr. Anil expressed interest in procuring the boiled rice from Telangana and a final decision on the price and modalities will be finalised at a meeting of the Commissioner of Civil Supplies of both governments which will be held soon.

The FCI procures at the rate of ₹39 per kilo of boiled rice and the Telangana government would be too happy to supply at the same price to Kerala as it would save the interest amount paid to the bankers and other sources., the Telangana government told the visiting team.