The Food Corporation of India (FCI): Govt Doubles Authorised Capital of FCI to Rs 21000 Crore

18-02-2024

01:41 PM

1 min read

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The Ministry of Consumer Affairs, Food and Public Distribution has increased the authorised capital of state-run FCI from ₹10,000 crore to ₹21,000 crore to enhance the operational capabilities and fulfil its mandate effectively.

It is a statutory body set up in 1965 (under the Food Corporation Act, 1964) under the Ministry of Consumer Affairs, Food and Public Distribution, Government of India.
It was set up against the backdrop of a major shortage of grains, especially wheat, in the country.
Currently, FCI is mandated with three basic objectives:
- To provide effective price support to farmers;
- To procure [at a minimum support price (MSP)] and supply grains to PDS for distributing subsidised staples to economically vulnerable sections of society; and
- Keep a strategic reserve to stabilise markets for basic foodgrains.

The FCI is undertaking a comprehensive initiative to create an integrated IT system, leveraging existing internal and external systems.
Through the e-office implementation, FCI is making efforts towards a paperless office culture.
These initiatives of integrated IT solutions serving as the core operational software for FCI, should provide a single source of information and streamline functions with a common digital backbone.
The FCI has also constructed cement roads, and invested in roof maintenance, illumination, and weighbridge upgradation.
Besides, it has also purchased lab equipment and developed a software platform for quality checking.
These measures are essential not only for reducing post-harvest losses but also for ensuring efficient distribution of food grains to consumers.

The Centre provides equity to the FCI for working capital requirements and the creation of capital assets.
The increase in authorised capital is a significant step towards enhancing the operational capabilities of FCI in fulfilling its mandate effectively.
FCI resorts to cash credit, short-term loan, ways and means etc. to match the gap in the fund requirement.
- The increase in the authorised capital will reduce the interest burden, decrease the economic cost and ultimately affect the government subsidy positively.
With this infusion of capital, the FCI should also embark upon modernising its storage facilities, improving transportation networks, and adopting advanced technologies.
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.

Source: Govt raises authorised capital of FCI from Rs 10,000 cr to Rs 21,000 cr