Strengthening FCI: ₹10,700 Crore sanctioned

The Cabinet Committee on Economic Affairs (CCEA) has approved a significant equity infusion of ₹10,700 crore into the Food Corporation of India (FCI). This initiative aims to bolster FCI’s operational capacity, enabling it to better support the agricultural sector and ensure the welfare of farmers across the nation.

Objective of the Equity Infusion

The approved funds will convert the ‘Ways and Means Advance’ into equity for the 2024-25 fiscal year, providing FCI with essential working capital. This move underscores the government’s commitment to reinforcing the agrarian economy and addressing the needs of farmers effectively.

Evolution of FCI

Established in 1964 with an initial authorized capital of ₹100 crore and equity of ₹4 crore, FCI has witnessed significant growth over the decades. By February 2024, its authorized capital had risen to ₹21,000 crore, with equity growing from ₹4,496 crore in 2019-20 to ₹10,157 crore in 2023-24.

The latest infusion marks a critical milestone in FCI’s financial trajectory. It comes at a time when farmers, particularly in Punjab and Haryana, have been advocating for enhanced procurement capacities to address delays in paddy collection post-kharif harvest.

Strengthening Operational Efficiency

This equity boost is expected to enhance FCI’s operational efficiency by reducing dependency on short-term borrowings. With lower interest obligations, the financial burden on the government’s subsidy program will also decrease, paving the way for a more sustainable funding model.

Commitment to Agriculture

The government’s decision highlights its dedication to the agricultural sector by improving FCI’s financial health and operational effectiveness. These enhancements are crucial for meeting the needs of farmers and ensuring the stability of India’s food security framework.

Looking Ahead

The ₹10,700 crore equity infusion is poised to drive transformative changes within FCI. Key priorities include optimizing procurement processes and upgrading storage infrastructure to ensure timely and efficient management of agricultural produce.

This investment not only addresses immediate challenges faced by farmers but also lays a strong foundation for the long-term growth and stability of India’s agrarian economy.