In a move to bring a uniform labour policy for the Food Corporation of India’s (FCI) 30,000 labour force, the government is considering a proposal to introduce a Voluntary Retirement Scheme (VRS) for the corporation’s around 8,600 workers under the Departmental Labour System (DLS), who get much higher wages and statutory benefits than the rest.

The workers under DLS get Rs 50,000-100,000 a month as salary and other benefits. According to food ministry sources, the average compensation package for the workers under DLS will be around Rs 14 lakh per person. The VRS would entail an expenditure of around Rs 1,500 crore.

The sources said if the entire labour force under the DLS category takes up the VRS, it would result in annual savings of close to Rs 2,000 crore for FCI for the next few years. Savings towards food subsidy expenses for FCI would occur as loading and unloading of foodgrains across 1,600 depots would be carried out by the contract workers rather than by the workforce under DLS.

More than 80% of such highly paid labour force under the DLS system are posted in depots located in the northern and eastern states.

FCI has around 15,000 workforces under a direct payment system where they are paid as per schedule piece rates and the average monthly salary is in the range of Rs 35,000 to Rs 40,000 a month. The rest of the 6,000 odd workers are employed under the ‘no work no pay’ system where the payment is around Rs 15,000 per month which is calculated based on the actual quantum of work done by the workforce.

An official said that the implementation of a single labour system will not only avoid financial burden but also will be operationally more feasible as FCI would be able to move labourers from one depot to another depot during exigencies for carrying out loading and unloading operations.

During the peak procurement session especially in April-June (wheat) and November – January (rice), a major chunk of rice and wheat procured by FCI in collaboration with state agencies arrive in the mandis thus pushing up demand for labour in the grains surplus states such as Punjab, Haryana, Madhya Pradesh and Rajasthan. Similarly, the grains are loaded into vehicles and transported to deficient regions such as eastern and north-eastern states where demand for labour to unload the foodgrains picks up.

On the disproportionately high wages paid to one section of the workforce, the Supreme Court in a judgment in 2016, had stated that there was something ‘seriously wrong’ with FCI where departmental labourers were paid substantially higher amounts as monthly salary compared to other categories of workers.

In the procurement year 2021-22 (October-September), FCI in collaboration with state agencies has so far procured close to 91 million tonne (mt) of rice and wheat, out of which around 60 mt of grains is distributed to around 81 crore beneficiaries under the National Food Security Act.

The rest of the grain stock is kept as a buffer and later some volume is sold in the open market to bulk buyers.

FCI transports around 70% of foodgrain via rail while the rest is transported through road transport.

The Union Budget (2022-23) has made a provision of Rs 2.06 trillion under food subsidy in 2022-23 out of Rs 1.45 trillion or 71% is allocated to FCI. More than 800 million people get highly subsidised five-kilogramme foodgrains per head per month under NFSA.