Govt to raise FCI's capital base from Rs3,500 cr to Rs.10,000 cr
27 November 2019
Government has approved a proposal for increasing in the authorised equity share capital of Food Corporation of India (FCI) by nearly three times - from the existing Rs3,500 crore to Rs10,000 crore.
The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi today approved the infusion of addition capital into FCI through budgetary allocation.
The infusion of fresh equity will help fund the foodgrains stock, perpetually held by FCI. This will reduce the borrowing costs of FCI, save interest cost and thereby reduce food subsidy, a cabinet release stated.
The operations of Food Corporation of India require maintaining perpetual stock of foodgrains, which needs to be funded by the central government through equity or long term loan. Government of India is providing equity to FCI for maintaining stocks. The present authorized equity capital of FCI is Rs3,500 crore and paid up equity capital as on 31 March 2019 is Rs3,447.58 crore.
Food Corporation of India was constituted under the Food Corporations Act, 1964, to implement the food policy of government of India. Its primary objective is to ensure Minimum Support Price to farmers, maintain buffer stock of foodgrains and distribution of foodgrains under National Food Security Act and other welfare schemes of Govt. of India.