New Delhi:The government is planning to restructure the State Farm Corporation of India (SFCI) as part of measures to increase production of quality seeds to be provided to farmers at affordable prices.
The Ministry of Agriculture is preparing a draft Cabinet note that seeks to convert a government loan of Rs124.42 crore, including an interest of Rs65.68 crore, into equity in SFCI.
Delhi-based SFCI was set up in 1969 and is one of the two public sector units to produce quality seeds. Its contribution to the country’s total seed production is about 7-9%.
The move comes in the context of the Union Budget 2007-08 National Development Council meeting earlier this year that outlined the need for enhancing the quality of seeds as a national priority to boost farm output.
According to a senior official in Agriculture Ministry, if loan is converted into equity SFCI would post net profit.
The proposal to the Cabinet would seek to set off the accumulated loss of Rs116.12 crore as on 31March, 2007 as against an equity capital of SFCI, the official said.
The corporation has also informed the ministry that it would need a grant of Rs21.21 crore for settlement of liabilities relating to Employee Provident Fund, which the official said might form part of the draft Cabinet note.
The proposal is also likely to seek support for need-based capital expenditure for acquisition of machinery and tools, land development, irrigation work, modernizing of workshops and construction of seed godowns and sheds.