New Delhi: The Cabinet Committee on Economic Affairs has given an approval to increase the authorised capital of FCI (Food Corporation of India) from the existing Rs 3,500 crores to Rs 10,000 crores.
With the increase in authorised capital, additional equity capital can be infused in FCI through Union Budget, to fund the foodgrains stock, perpetually held by FCI. This will reduce the borrowings of FCI, save interest cost of FCI and reduce food subsidy in consequence, said a press release.
The operations of FCI require maintaining perpetual stock of foodgrains which needs to be funded by the Central government through equity or long-term loan. The government is providing equity to FCI for maintaining stocks.
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The present authorised equity capital of FCI is Rs 3,500 crores and paid up equity capital as on March 31 was Rs 3,447.58 crores.
Food Corporation of India was constituted under the Food Corporations Act, 1964, to implement the food policy of the government. Its primary objective is to ensure Minimum Support Price to farmers, maintain buffer stock of foodgrains and distribution of foodgrains under National Food Security Act and other welfare schemes of the government.