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The authorised capital of Food Corporation of India increased to Rs.10000 cr from Rs.3500 cr

The authorised capital of Food Corporation of India increased to Rs.10000 cr from Rs.3500 cr

The Cabinet Committee on Economic Affairs, which is chaired by the Prime Minister Narendra Modi, has approved to increase the authorised capital of Food Corporation of India (FCI) from the existing 3,500 crore rupees to 10,000 crore rupees.

Key Points:

  • Additional equity capital would be infused in the FCI through the Union Budget, to fund the foodgrains stock which is perpetually held by FCI. 
  • By doing this, it will reduce the borrowings of FCI, save its interest cost and reduce food subsidy in consequence.
  • The operations of the FCI are required to maintain a stock of foodgrains which needs to be funded by the Government of India through equity or a long-term loan.
  • The present authorised equity capital of it is Rs 3,500 cr and the paid-up equity capital as on March 31, 2019, is Rs 3,447.58 cr.

About FCI:

  • FCI was initiated under the Food Corporations Act 1964, to implement the food policy of the government.
  • The primary objective is to ensure Minimum Support Price (MSP) to farmers, maintain a buffer stock of foodgrains besides distribution of foodgrains under the National Food Security Act and other welfare schemes of the central government.

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