Additional fund for food grains
The Cabinet Committee on Economic Affairs 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 Union Budget, to fund the stock of food grains, perpetually held by FCI.
This will reduce the borrowings of FCI, save interest cost of FCI and reduce food subsidy in consequence, said the Ministry of Consumer Affairs, Food & Public Distribution on 27 Nov 2019.
The FCI operations require maintaining perpetual stock of food grains which needs to be funded by the Government through equity or long term loan.
The Government is providing 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 the Government. Its primary objective is to ensure Minimum Support Price to farmers, maintain buffer stock of food grains and distribution of food grains under National Food Security Act and other welfare schemes of the Government. fiinews.com