The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi has approved infusion of equity of ₹10,700 crore for working capital in financial year 2024-25 in Food Corporation of India (FCI). The decision is aimed at bolstering the agricultural sector and ensuring the welfare of farmers nationwide. This strategic move shows the government’s steadfast commitment to supporting farmers and fortifying India’s agrarian economy, the CCEA said in a statement.FCI started its journey in 1964 with an authorised capital of ₹100 Crore and equity of ₹4 crore. The operations of FCI increased manifolds resulting in increase of authorised capital from ₹11,000 crore to ₹21,000 crore in February, 2024. The equity of FCI was ₹4,496 crore in Financial Year 2019-20 which increased to ₹10,157 crore in the Financial Year 2023-24. Now, the Union government has approved significant amount of equity of ₹10,700 crore for FCI which will strengthen it financially and will give a big boost to the initiatives taken for its transformation, it said.
FCI plays a pivotal role in ensuring food security by procurement of food grains at minimum support price (MSP), maintenance of strategic food grain stocks, distribution of food grains for welfare measure and stabilization of food grain prices in the market.
The infusion of equity is a significant step towards enhancing the operational capabilities of FCI in fulfilling its mandate effectively, the government said, adding that FCI resorts to short term borrowings to match the gap of fund requirement. This infusion will help to lower the interest burden and will ultimately reduce the subsidy of Government of India, it stated.
The government’s dual commitment to MSP-based procurement and investment in FCI’s operational capabilities signifies a collaborative effort towards empowering farmers, fortifying the agricultural sector, and ensuring food security for the nation, it added.
