The Cabinet Committee on Economic Affairs (CCEA) chaired by the  Prime Minister Shri Narendra Modi, has approved infusion of equity of Rs.10,700 crore for working capital in financial year 2024-25 in Food Corporation of India (FCI).  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.

FCI started its journey in 1964 with authorised capital of Rs. 100 Crores and equity of Rs. 4 Crores.  The operations of FCI increased manifolds resulting in increase of authorised capital from Rs. 11,000 crores to Rs. 21,000 crores in February, 2023.  The equity of FCI was Rs. 4,496 Crores in Financial Year 2019-20 which increased to Rs. 10,157 Crores in the Financial Year 2023-24.  Now, Government of India has approved significant amount of equity of Rs. 10,700 Crores for FCI which will strengthen it financially and will give a big boost to the initiatives taken for its transformation.  

FCI plays a pivotal role in ensuring food security by procurement of food grains at Minimum Support Price (MSP), maintenance of strategic food grain stocks, distribution of food grains for welfare measure and stabilization of food grain prices in the market.

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 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

Equity infusion converting Ways and Means Advance to equity strengthens working capital and lowers interest burden. Conversion of a Ways and Means Advance into equity is approved to bolster Food Corporation financing by strengthening working capital, reducing reliance on short term borrowings and associated interest costs, and enhancing the corporation's capacity to perform MSP procurement, stock maintenance, welfare distribution, and price stabilization.