The Food Corporation of India has incurred avoidable interest of Rs 35,701 crore in the last 5 years due to bureaucratic inefficiency. To put that in perspective, that money could buy 21 Neymars, the Brazilian football star whose transfer deal is making waves around the world.
Or, it could fund the National Rural Employment Guarantee programme for 9 months.
A Comptroller and Auditor General of India audit has found that between 2011 and 2016 the FCI incurred interest of Rs 35,701 crore on account of borrowings due to delayed food subsidy payments by the government.
On average, the exchequer gave the FCI only 67% of the money the corporation claimed in the 5 years to 2016. The FCI as a result had to borrow the shortfall from the market and the interest payment on these borrowings could have purchased 2 football teams of Neymars.
Consider the maths. Neymar, the 25 year old football sensation, is moving from Spanish giants Barcelona to the French team Paris St. Germain for €222 million, which is the transfer fee.
This is around Rs 1,676 crore as per today's Rupee/Euro closing exchange rate. Now, a simple back of the envelope calculation shows that the interest payments (Rs 35,701 crore) could pay for Neymar's transfer 21 times over with some cash to spare.
In other words, dear taxpayer, if the exchequer had paid the FCI the money it demanded on time, our government could have theoritically funded the purchase of almost 2 teams of Neymars, 11 players per team!
Or, it could have have had money to fund almost 9 months of NREGA payments. Finance Minister Arun Jaitley allocated Rs 48,000 crore for NREGA for FY 2017-18.
The CAG report was tabled in Parliament today. Ashutosh Sharma, Principal Director of Audit at the CAG and the lead auditor of the report told News18 that the reason for the non-payment of the full amount could be that the Finance Ministry may not have found the funds to give to the Ministry of Consumer Affairs, under who the FCI comes.
The Food Corporation of India was established to distribute foodgrains, provide price support to farmers and maintaining buffer stocks of food. The audit by the CAG was of the debt management practices of the Corporation.
Since the exchequer was not able to provide the FCI the money it demanded, the corporation had to take loans from banks and float short term and long term bonds on the market. The interest on those loans will have to be paid by the finance ministry, or taxpayer money.
Put in another way, bureaucratic inefficiency has added Rs 35,701 crore in five years to the food subsidy bill. The food subsidy claimed by FCI in 2015-16 was Rs 1.03 lakh crore.