The Cabinet Committee on Economic Affairs, on November 6, 2024, approved the infusion of equity of Rs 10,700 crore in Food Corporation of India (FCI) by way of conversion of ‘Ways and Means Advance’ to equity in 2024-25.
- This will be used as working capital for the FCI in this financial year. The decision is aimed at bolstering the agricultural sector and ensuring the welfare of farmers nationwide.
- The FCI infusion allocates Rs 10,700 crore to meet the working capital needs of this fiscal year, as the agency contends with rising costs driven by an increase in the minimum support price (MSP) and stock volume.
- Ways and Means Advance (WMA) is temporary credit allocated by Gol which is to be repaid on or before 31st March of the same financial year.
- Interest rate of this loan is at par with the weighted average rate of interest for 364 days T Bills during the relevant financial year.
- FCI, which started its journey in 1964 with authorised capital of Rs 100 crore and equity of Rs four crore, has an authorised capital of Rs 21,000 crore in February 2024.
- Farmers, particularly from Punjab and Haryana, had demanded the Centre to increase the capacity of the FCI as there was delay, reportedly in procuring paddy after this kharif harvest.
- The FCI is the government’s nodal agency for procurement and distribution of foodgrains.
