Central Govt raises authorised capital of Food Corporation of India(FCI)

Context: The Ministry of Consumer Affairs, Food and Public Distribution has raised the approved capital of FCI, a government-owned organisation, from ₹10,000 crore to ₹21,000 crore in order to improve its operational abilities and effectively fulfil its responsibilities.

Key Points:

• The Food Corporation of India (FCI) is responsible for buying food at minimum support price (MSP) to protect farmers and maintaining reserves for welfare programs. 
• Increasing the authorised capital will reduce the need for loans, lowering interest costs and improving subsidy management. 
• FCI plans to modernise storage and transportation, adopting advanced technologies to reduce losses and improve food distribution. 
• The government provides funding and FCI is implementing IT systems for efficiency. 
• Initiatives like e-office implementation aim to streamline functions digitally. 
• FCI has taken steps to improve efficiency through infrastructure upgrades, lab equipment purchase, and software development for quality checking. 
• The government’s commitment to MSP-based procurement and investment in FCI’s capabilities highlights its dedication to empowering farmers and ensuring food security.

About Food Corporation of India (FCI):

• Food Corporation of India (FCI) is a government agency under the auspices of the Ministry of Consumer Affairs, Food and Public Distribution and established in 1965.
• It was established after a shortage of grains, wheat being the most affected in the country.
• The FCI has three main goals: supporting the farmers by giving them a fair price for their production, purchasing the grains to be supplied to PDS to meet the subsidised food requirements for the people in need and keeping a reserve of food to maintain market stability.

FCI has implemented measures to improve its efficiency:

• The FCI is going to make a unified IT system by integration of several intra- and inter- IT systems.
  • They, additionally, are applying the e-office system in order to minimise the use of paper.
• The schemes will serve as the main IT solutions in FCI, becoming a single information source and a key to a unified operation.
• Additionally, FCI has been executing other tasks to upgrade infrastructure through building cement roads, fixing roofs, weighbridges maintenance and purchasing laboratory equipment.
• This is meant to minimise post-harvest food losses and enhance the free flow of grains from farmers to consumers.

Importance of Increase in Authorised Capital of FCI:

• The Centre gives financial support to the FCI for its day-to-day operations and for creating assets.
• Increasing the authorised capital will improve the FCI’s ability to fulfil its responsibilities effectively.
• The FCI currently relies on various sources of funding to meet its financial needs.
• The increase in authorised capital will reduce interest expenses and positively impact government subsidies.
• Along with this capital infusion, the FCI should also focus on modernising its storage facilities, improving transportation networks, and adopting new technologies.
• The government’s commitment to both MSP-based procurement and investing in the FCI’s capabilities shows a joint effort to empower farmers, strengthen the agricultural sector, and ensure food security for the nation.

Conclusion:

• The government has raised FCI’s authorised capital to improve food distribution infrastructure and help farmers. 
• FCI plans to invest in modernization and efficiency projects to enhance food grain management and support national food security goals.

Source: The Hindu

UPSC Prelims Practice Question:

Q.The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus

1. It is a Public Limited Government Company.
2. It is a Non-Banking Financial Company.

Select the correct answer using the code given below:

a. Transportation cost only

b. Interest cost only

c. Procurement incidentals and distribution cost

c. Procurement incidentals and charges for godowns

Ans: “c”

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