Authorised capital of Food Corporation of India increased to Rs.10000 cr from Rs.3500 cr
Cabinet Committee on Economic Affairs (CCEA) approved increasing authorized capital of Food Corporation of India (FCI) from existing Rs.3,500 crore to Rs.10,000 crore. CCEA was chaired by Prime Minister Narendra Modi.
FCI’s operations require maintaining perpetual stock of foodgrains which needs to be funded by government of India through equity or via long term loan. Therefore, Centre government is providing equity to FCI for maintaining stocks. As on 31 March 2019, the present authorized equity capital of FCI is Rs.3,500 crore and paid up equity capital is Rs.3447.58 crore.
Significance: With the increase of authorized capital, additional equity capital can be infused in Food Corporation of India (FCI) through Union Budget for funding foodgrains stock, perpetually held by FCI. This will reduce thereby FCI’s borrowings, save FCI’s interest cost as well as reduce food subsidy in consequence.
About Food Corporation of India (FCI)
It was constituted under Food Corporations Act, 1964, to implement the objectives of National Food Policy of Government of India. FCI is a government-owned corporation under Department of Food and Public Distribution of Union Ministry of Consumer Affairs, Food and Public Distribution.
FCI Objectives: to ensure food security of Nation; to ensure Minimum Support Price (MSP) to farmers; to maintain buffer stock of foodgrains; distribution of foodgrains under National Food Security Act (NFSA); and execution of government policies and welfare schemes.
Category: Economy & Banking Current Affairs