Centre infuses equity of ₹10,700 crore in Food Corporation of India

The Centre said that the decision is aimed at bolstering the agricultural sector and ensuring the welfare of farmers nationwide

The Cabinet Committee on Economic Affairs, on Wednesday (November 6, 2024), approved the infusion of equity of ₹10,700 crore in Food Corporation of India (FCI) by way of conversion of ‘Ways and Means Advance’ to equity in 2024-25. This will be used as working capital for the FCI in this financial year.

The Centre said that the decision is aimed at bolstering the agricultural sector and ensuring the welfare of farmers nationwide. “This strategic move shows the Government’s steadfast commitment to supporting farmers and fortifying India’s agrarian economy,” the Centre said in a release after the CCEA meeting.

It added that the FCI, which started its journey in 1964 with authorised capital of ₹100 crore and equity of ₹four crore, has an authorised capital of ₹21,000 crore in February. “The equity of FCI was ₹4,496 crore in 2019-20 which increased to ₹10,157 crore in 2023-24. Now, Government of India has approved significant amount of equity of ₹10,700 crore for FCI which will strengthen it financially and will give a big boost to the initiatives taken for its transformation,” the Centre said.

Farmers, particularly from Punjab and Haryana, had demanded the Centre to increase the capacity of the FCI as there was delay, reportedly in procuring paddy after this kharif harvest. “The infusion of Equity is a significant step towards enhancing the operational capabilities of FCI in fulfilling its mandate effectively. FCI resorts to short term borrowings to match the gap of fund requirement. This infusion will help to lower the interest burden and will ultimately reduce the subsidy of Government of India,” the release added.

Published - November 06, 2024 10:17 pm IST