New Delhi: The Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister Narendra Modi has approved to increase the authorized capital of Food Corporation of India (FCI) from existing Rs 3,500 crore to Rs 10,000 crore.
With the increase of authorized capital, additional equity capital can be infused in FCI through the Union Budget to fund the foodgrains stock perpetually held by FCI. This will reduce the borrowings and save interest cost of FCI and reduce food subsidy in consequence.
The operations of FCI require maintaining perpetual stock of foodgrains which needs to be funded by the Government of India through equity or long term loan.
The Govt provides equity to FCI for maintaining stocks. The present authorized equity capital of FCI is Rs 3,500 crore and paid-up equity capital as on 31 March 2019 is Rs 3,447.58 crore.
FCI was constituted under the Food Corporations Act, 1964, to implement the food policy of Government of India. Its primary objective is to ensure Minimum Support Price to farmers, maintain a buffer stock of foodgrains and distribution of foodgrains under the National Food Security Act and other welfare schemes of Govt of India.
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