New Delhi: In a significant move to enhance foodgrain procurement and streamline subsidy management, the Ministry of Consumer Affairs, Food and Public Distribution has signed a Memorandum of Understanding (MoU) with the Food Corporation of India (FCI) for the fiscal year 2025–26.
The agreement outlines specific, measurable targets aimed at improving efficiency, minimising losses, and ensuring optimal use of public funds allocated under the food subsidy programme.
Key Focus Areas of the MoU
According to an official statement, the MoU emphasizes a technology-driven, systems-based approach to modernise FCI operations. It seeks to address the following critical areas –
- Minimising storage and transit losses
- Optimal utilisation of storage capacity
- Strengthening quality control mechanisms
- Adoption of latest IT innovations
- Digitisation of procurement and distribution processes
- Enhanced monitoring and analytics
- Supply chain and logistics performance improvement
- Capacity-building for FCI staff
Government Committed to Efficient Subsidy Utilisation
The MoU reflects the Centre’s commitment to ensuring that food subsidy funds are utilised transparently and efficiently. Currently, the Government of India provides 5 kg of foodgrains free of cost to over 80 crore beneficiaries under the National Food Security Act (NFSA).
This agreement aims to bolster the backend operations that support such massive public distribution, ensuring that leakages, delays, and inefficiencies are minimised.
About FCI
The Food Corporation of India (FCI) was established in 1965 under the Food Corporations Act, 1964, with the core responsibility of –
- Procurement of foodgrains at MSP (Minimum Support Price)
- Storage and scientific warehousing
- Transportation and logistics
- Distribution under the public distribution system (PDS)
- Sale of foodgrains to maintain buffer stocks and price stability
Impact of the MoU
This MoU for FY 2025-26 marks a continuation of the Centre’s broader reform agenda in the food supply ecosystem. With a focus on digitisation, quality control, and performance-linked targets, the move is expected to enhance transparency, accountability, and operational excellence within FCI and the wider food distribution network.
