Government Approves Rs. 10,700 Crore Equity Infusion for Food Corporation of India to Boost Agricultural Sector

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved an infusion of Rs. 10,700 crore in equity for the Food Corporation of India (FCI) for the financial year 2024-25. This decision is aimed at strengthening FCI’s working capital and ensuring the continued support of farmers across the country, reflecting the government’s ongoing commitment to enhancing India’s agricultural sector.

FCI, established in 1964 with an authorized capital of Rs. 100 crore and an initial equity of Rs. 4 crore, has seen significant growth over the years. Its authorized capital was raised from Rs. 11,000 crore to Rs. 21,000 crore in February 2023, while its equity increased from Rs. 4,496 crore in FY 2019-20 to Rs. 10,157 crore in FY 2023-24. The latest infusion of Rs. 10,700 crore will further strengthen FCI financially and aid its ongoing transformation initiatives.

As the backbone of India’s food security system, FCI plays a critical role in procuring food grains at the Minimum Support Price (MSP), maintaining strategic food reserves, and distributing grains under various welfare schemes. The infusion of equity will enhance FCI’s operational capabilities, reduce its reliance on short-term borrowings, and alleviate the interest burden, ultimately lowering the subsidy provided by the government.

This move aligns with the government’s dual commitment to supporting MSP-based procurement and investing in the operational efficiency of FCI, ensuring that it continues to fulfill its mandate of ensuring food security and stabilizing food prices in the market. The infusion is seen as a significant step towards strengthening India's agricultural economy and further empowering farmers.