New Delhi: The government on Tuesday approved a short-term loan of Rs 5,000 crore for Food Corporation of India (FCI). The approval will help the organisation meet its working capital requirements this fiscal.

The Cabinet Committee on Economic Affairs (CCEA) cleared the proposal during a meeting held here.

FCI, the nodal agency for procurement and distribution of foodgrains, will repay the loan in the next fiscal, it said.

The CCEA noted that this arrangement of financing (short-term loan) would be cheaper than the option of hiking the FCI's cash credit limit (CCL) to enable it to borrow more funds.

CCL is a secured working capital loan given by banks on the basis of turnover, debtors, creditors and stock in hand.

Grant of the short-term loan of Rs 5,000 crore to FCI will enable it to carry out its mandated activities of procurement, storage and distribution of foodgrains as per government policy.