The Open Market Sale Scheme (OMSS) is a crucial policy tool used by the Government of India to manage food grain stocks, control inflation, and ensure food security. This scheme, primarily implemented by the Food Corporation of India (FCI), involves offloading surplus food grains from the central pool into the open market. This article will explore the objectives of OMSS, its operational changes, and the measures taken to enhance the efficiency of FCI processes.
Objectives of the Open Market Sale Scheme (OMSS)
The primary objectives of the OMSS are:
-
Inflation Control: To control inflation by offloading surplus food grains and stabilizing market prices.
-
Affordable Food Availability: To ensure that wheat and rice are available to consumers at affordable prices.
-
Surplus Stock Management: To manage excess stocks of food grains beyond the buffer and strategic reserve norms in the central pool.
-
Transparent Operations: To conduct the sale of food grains in a transparent manner through online e-auctions.
Operational Aspects of OMSS
-
Policy Formulation: The OMSS policy is formulated annually and reviewed periodically based on the surplus stock position, prevailing market prices, and other relevant factors.
-
Reserve Price Fixation: The reserve price for the sale of wheat and rice is fixed, taking into consideration the Minimum Support Price (MSP), excess stocks, and prevailing market prices.
-
Online E-Auctions: The sale of food grains under OMSS is conducted through online e-auctions to empanelled parties.
-
Prompt Release Orders: Release Orders for the sold quantity are issued promptly to successful bidders after they deposit the cost.
-
Biofuel Policy: The government also allows the sale of surplus rice stocks for the production of ethanol under the Biofuel policy.
Measures for Betterment of FCI Processes
To improve the efficiency and transparency of FCI’s operations, the following actions have been taken:
-
AI-Based Grain Analyzer: Developed an AI-based grain analyzer to eliminate human discretion in quality assessment of food grains, enhancing transparency and optimizing manpower.
-
Digitization of Workflow: Digitization of workflows through e-Office in 198 FCI offices up to the divisional level, making FCI a less paper-based organization.
-
Silo Capacity Construction: Awarded contracts for the construction of 34.87 LMT SILO capacity under the Hub and Spoke model, improving bulk handling of grains.
-
Elimination of Open Storage: Open storage of food grains (CAP storage) has been eliminated.
-
Third-Party Assessment: Third-party assessments of all warehouses are being conducted, with phased upgradation to meet high standards.
-
Mechanization of Handling: Mechanization of bag handling has been initiated to reduce dependence on manual labor and improve operational efficiency.
-
Online Payments: All bills from stakeholders are accepted online, and payments are made online, improving transparency and service delivery.
-
Manpower Rationalization: Initiated a process to rationalize manpower based on a study by the Center for Good Governance (CGG).
-
Tracking of Food Grains: Trucks engaged in the transportation of food grains are tracked using tamper-proof technology.
-
High-Security Seals: High-security seals have been introduced for railway wagons, resulting in substantial savings on transit losses.
-
Reduced Borrowings: The government has provided subsidies to FCI, reducing its borrowings from Rs. 3,28,153 crore in FY2019-20 to Rs. 40,151 crore as of February 28, 2023.
Financial Aspects
To meet its working capital requirements, FCI relies on various sources of funds, including:
-
Subsidies
-
Government of India Guaranteed Bonds
-
Cash Credit Limits
-
Ways and Means Advances
-
Short-term Loans
Conclusion
The Open Market Sale Scheme (OMSS) is a vital instrument for ensuring food security and price stability in India. By strategically offloading surplus food grains and implementing measures to improve the efficiency of FCI operations, the government is working towards a more resilient and transparent food management system. The ongoing efforts to modernize FCI processes and reduce its financial burden will further enhance the effectiveness of the scheme.