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

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

What’s in Today’s Article?

  • Why in News?
  • What is the Food Corporation of India (FCI)?
  • Steps Taken by the FCI to Enhance its Efficiency
  • Significance of Increase in Authorised Capital of FCI

Why in News?

  • 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.

What is the Food Corporation of India (FCI)?

  • 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.

Steps Taken by the FCI to Enhance its Efficiency

  • 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.

Significance of Increase in Authorised Capital of FCI

  • 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