The state government has decided to scrap its foodgrain pool. With the abolition of the state pool, the Food Corporation of India (FCI) will now be the sole agency for the procurement of foodgrain in UP.

Earlier, the state agencies procured grain during rabi and kharif crops from the farmers for the state pool, while the FCI did the same for the Central pool. Now, the state agencies will also procure for the Central pool and FCI will look after the storage.

The decision has been taken at the highest political level and is likely to be placed before the cabinet soon for formal approval.

Official sources indicated that the cabinet approval will be obtained via the circulation method.

The additional financial burden on the government has been cited as the major reason for the scrapping of the state pool. The government has to bear the incidental charges like procurement, handling, storage and transportation charges of foodgrain during both rabi and kharif seasons.

The audited account of wheat and paddy procurement is submitted to the Union food ministry, which is later reimbursed to the state government by the Centre. Reimbursement by the Centre is usually delayed as audited accounts are not submitted as per schedule, leading to blocking of huge funds of the state government.

The annual food subsidy bill of the state is over Rs 3,000 crore.

For the 2008-09 fiscal, against the total incidental expenses of Rs 3,492 crore, the Centre has released only Rs 2,800 crore as adhoc payment, since the accounts are yet to be submitted by the state government to the Union food ministry.

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