Thursday, 19 January 2017

Government approves Rs 45,000 cr loan to FCI from NSSF

The government has approved Rs 45,000 crore loan to FCI out of National Small Savings Fund, while exempting most of the states and UTs from mandatory investment norms with regard to funds collected under the NSSF scheme. The Cabinet decision to exempt states barring four, Arunachal Pradesh, Delhi, Kerala and Madhya Pradesh, from NSSF investments from April 1, 2016 will help them raise cheaper funds from the market and reduce interest outgo. 

The Cabinet meeting headed by Prime Minister Narendra Modi also approved providing one-time loan of Rs 45,000 crore from NSSF to FCI to meet its food subsidy requirements. Servicing of interest and principal of debt is extended to FCI through the budget line of Department of Food and Public Distribution. "The repayment obligation of the FCI in respect of NSSF Loans would be treated as the first charge on the food subsidy released to the FCI.

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