PIB News Update: The Cabinet Committee on Economic Affairs chaired by the Prime Minister Shri Narendra Modi has approved to increase the authorized capital of Food Corporation of India (FCI) from existing Rs.3,500 crore to Rs.10,000 crore.
With the increase of authorized capital, additional equity capital can be infused in FCI through Union Budget, to fund the foodgrains stock, perpetually held by FCI. This will reduce the borrowings of FCI, save interest cost of FCI and reduce food subsidy in consequence.
Background:The operations of Food Corporation of India require maintaining perpetual stock of foodgrains which needs to be funded by the Govt. of India through equity or long term loan. The Govt. of India is providing equity to FCI for maintaining stocks. The present authorized equity capital of FCI is Rs.3,500 crore and paid up equity capital as on 31.03.2019 is Rs.3,447.58 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.