The government has recently increased the authorised capital of the Food Corporation of India (FCI) to enhance its operational capabilities effectively.
About the recent moves:
- This increase aims to reduce FCI’s reliance on cash credit, short-term loans, and other financial mechanisms for funding, thereby decreasing the interest burden and the economic cost, which will positively impact the government subsidy.
- With the increased authorised capital, FCI can modernize storage facilities, improve transportation networks, adopt advanced technologies, reduce post-harvest losses and ensure efficient food grain distribution.
About the Authorised capital:
- Authorised capital refers to the maximum value of shares a company can issue, which is specified in the company’s MoA or articles of incorporation.
- It is also known as authorized stock or shares.
About the FCI:
- The FCI is a public sector undertaking that procures food grains at MSP to protect farmers’ interests, maintains strategic food grain stocks, and distributes them for National Food Security.
- It was established in 1965 under the Food Corporation’s Act 1964.
- It operates under the Ministry of Consumer Affairs, Food and Public Distribution with equity provided by the Central government for capital and operational needs.
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