The Government of India has increased the authorised capital of state-run Food Corporation of India (FCI) from Rs 10,000 crore to Rs 21,000 crore to enhance the operational capabilities and fulfill its mandate effectively.
Key points
- According to a food ministry notification, the move would infuse additional equity capital to fund the foodgrains stocks held by FCI, which is entirely owned by the government.
- FCI is the central government’s nodal agency that undertakes procurement of foodgrains at a minimum support price (MSP) to protect the interest of farmers.
- It also maintains strategic stocks and distributes the grains under different welfare schemes.
- FCI resorts to cash credit, short-term loan, ways and means etc. to match the gap in the fund requirement.
- Open market sales of grains procured at MSP by the FCI also helps reduce its losses, and contain the food subsidy, although the practice is of keeping high buffers.
