The Cabinet Committee on Economic Affairs (CCEA), led by Prime Minister Narendra Modi, has approved a major financial boost of Rs. 10,700 crore for the Food Corporation of India (FCI) in the financial year 2024-25. This money will be used to strengthen FCI’s working capital and improve its ability to support farmers and ensure food security across the country.
What Is FCI and Why Is It Important?
The Food Corporation of India (FCI) plays a very important role in India’s food security system. It helps by:
- Buying food grains like wheat and rice from farmers at the Minimum Support Price (MSP), ensuring farmers get a fair price.
- Storing these grains to create a buffer stock that can be used in times of need.
- Distributing grains to people through government welfare programs like the Public Distribution System (PDS).
- Keeping food prices stable in the market to protect consumers.
How Is FCI Growing?
FCI was established in 1964 with a capital of Rs. 100 crore. Over the years, its operations have grown significantly, and so has its capital. In February 2024, the government increased FCI’s authorized capital from Rs. 11,000 crore to Rs. 21,000 crore. The corporation’s equity also increased from Rs. 4,496 crore in 2019-20 to Rs. 10,157 crore in 2023-24.
This new equity infusion of Rs. 10,700 crore will further strengthen FCI’s financial position and help it expand its services. It will also help FCI to carry out its transformation and modernize its operations.
Why Is This Infusion Important?
The infusion of Rs. 10,700 crore will help FCI in several ways:
- Improved Operational Capabilities: It will allow FCI to work more efficiently and handle its growing responsibilities better.
- Lower Interest Costs: FCI often borrows money for short-term needs. With this infusion, it will need to borrow less, which will reduce interest expenses and save government money.
- Better Support for Farmers: FCI can now do more to support farmers by buying their crops at MSP and ensuring fair prices.
Impact on Food Security and Farmers
This infusion reflects the government’s strong commitment to the agricultural sector. By ensuring that FCI has enough funds, the government is not only helping farmers by securing a good price for their crops, but it is also strengthening food security for the entire nation.
With the added capital, FCI can continue to store enough food to manage shortages during bad weather or other crises. It also means that more food grains can be distributed to those who need it, helping to reduce hunger and poverty.
Conclusion
The government’s decision to invest Rs. 10,700 crore in FCI shows a clear focus on improving the country’s agricultural systems. This move will not only help farmers get better prices for their crops, but also ensure that India’s food security system remains strong and reliable for everyone.