The government has increased the authorised capital of state-run Food Corporation of India (FCI) from Rs 10,000 crore to Rs 21,000 crore to enhance the operational capabilities and fulfill its mandate effectively, the Food Ministry said on Saturday.
FCI is the central government's nodal agency that undertakes procurement of foodgrains at a minimum support price (MSP) to protect the interest of farmers. It also maintains strategic stocks and distributes the grains under different welfare schemes.
"The increase in authorized capital is a significant step towards enhancing the operational capabilities of FCI in fulfilling its mandate effectively," the ministry said in a statement.
Financial Impact
FCI resorts to cash credit, short-term loan, ways and means etc. to match the gap in the fund requirement. The increase in the authorised capital will reduce the interest burden, decrease the economic cost and ultimately affecting the government subsidy positively, it said.
Modernization Initiatives
With this infusion of capital, the FCI should also embark upon modernizing its storage facilities, improving transportation networks, and adopting advanced technologies.
These measures are essential not only for reducing post-harvest losses but also for ensuring efficient distribution of food grains to consumers, it added.
The Centre provides equity to the FCI for working capital requirement and for creation of capital assets. The FCI is undertaking a comprehensive initiative to create an integrated IT system, leveraging existing internal and external systems.
Through the e-office implementation FCI is making efforts towards a paperless office culture.
These initiatives of integrated IT solutions serving as the core operational software for FCI, should provide a single source of information and streamline functions with a common digital backbone.
According to the ministry, the FCI has taken several steps to enhance its efficiency including construction of cement roads, roof maintenance, illumination, and weighbridge upgradation.
Besides, it has also purchased lab equipment and developed a software platform for quality checking.
The government's dual commitment to MSP-based procurement and investment in FCI's operational capabilities signifies a collaborative effort towards empowering farmers, fortifying the agricultural sector, and ensuring food security for the nation, it said.
