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Role of IT in future restructured FCI

While the IT initiative implemented so far has contributed immensely to improve efficiency in the operations of FCI, there is a lot more that use of IT can do in future improving the efficiencies of the organization.  

The operations of FCI are primarily a supply chain mechanism wherein foodgrains are procured from farmers at MSP from various mandis and then they are moved to various FCI depots through road or rail and finally distributed to State Agencies for TPDS and OWS as per the allocations made.  Such an operation requires adoption of a Warehouse Management System which would help improve the supply chain management by controlling the movement and storage of foodgrains from and within various depots and automate the various processes involved in procurement, storage and movement.  The present IT applications are implemented as stand-alone solutions and have not been integrated as an end-to-end solution which would have helped to ensure optimization and reduce costs. The various modules that can be part of the IT back bone for the organization will address the key challenges at various stages of FCI operations and help bring in efficiency.  Some of the initiatives that can be part of the modules are the following:-

2.1 Procurement – Presently the bulk of the procurement happens at the mandis where farmers bring in foodgrains which are taken over by Arhtiyas who act as a go-between the farmers and FCI.  The arhtiyas plays a critical role in the supply chain by ensuring that foodgrains that are procured by FCI conform to the quality specifications and he receives the payments from FCI which he further passes on to the farmers after deducting the charges and whatever advances he might have given to the farmers as a loan.  Thus, the role of Arhtiya that appears to be necessary in the supply chain but it does add to the inefficiency of the system as there is a cost associated to it.

The use of IT can eliminate or reduce the role of Arhtiya in the procurement process.  With the increasing use of IT in various spheres of the Government today, we have a scenario where the land records are computerized, most farmers have Aadhar numbers and they also have bank accounts and mobile phones.   Through IT initiative if we are able to link the Aadhar number  of the farmers with the land records data and also add the bank account numbers and mobile numbers of farmers then we could possibly assess the actual likely arrival of foodgrains at mandis in advance.