What is the correct statement regarding the government's decision to raise the authorized capital of FCI?

1. The increase in authorized capital will increase the economic cost and negatively impact government subsidies.

2. FCI is responsible for the procurement of foodgrains at a maximum support price (MSP).

3. The Food Corporation of India (FCI) was established under the Food Corporations Act 1964.

Solution

• The government has increased the authorised capital of state-run Food Corporation of India (FCI) from ₹10,000 crore to ₹21,000 crore to enhance the operational capabilities and fulfill its mandate effectively. • FCI is the central government's nodal agency that undertakes the procurement of foodgrains at a minimum support price (MSP) to protect the interest of farmers. • It also maintains strategic stocks and distributes the grains under different welfare schemes. • The increase in the authorised capital will reduce the interest burden, decrease the economic cost and ultimately affecting the government subsidy positively. • Learn Along: • About FCI •  Food Corporation of India (FCI) is a Public Sector Undertaking, under the Department of Food & Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution. • FCI is a statutory body set up in 1965 under the Food Corporations Act 1964. It was established against the backdrop of major shortage of grains, especially wheat. • Simultaneously, Commission for Agricultural Costs and Prices (CACP) was created in 1965 to recommend remunerative prices to farmers.