The Cabinet Committee on Economic Affairs (CCEA),

Solution

• Infusion of Equity for FCI (2024-25): o The Cabinet Committee on Economic Affairs (CCEA), under the leadership of Prime Minister Shri Narendra Modi, approved the infusion of ₹10,700 Crores for the Food Corporation of India (FCI) as part of the working capital for the financial year 2024-25. o This move aims to strengthen the agricultural sector and ensure the welfare of farmers. • Purpose of the Capital Infusion:  o The capital infusion is intended to bolster FCI's operational capabilities and provide a boost to initiatives aimed at the transformation of FCI. o FCI plays a crucial role in ensuring food security through procurement, distribution, and maintaining strategic food stocks. • FCI's Role in India's Agricultural Economy: o FCI's Key Responsibilities: ▪ Procurement of food grains at the Minimum Support Price (MSP). ▪ Distribution of food grains for welfare measures. ▪ Stabilization of food grain prices in the market to ensure food security.  • Historical Overview of FCI's Capital and Operations: o FCI began its operations in 1964 with an initial authorised capital of ₹100 Crores and equity of ₹4 Crores. o Over the years, FCI’s operations increased, leading to a rise in its authorised capital to ₹21,000 Crores by February 2024. o The equity of FCI was ₹4,496 Crores in the financial year 2019-20 and increased to ₹10,157 Crores in 2023-24. • Impact of the Infusion:  o The infusion of ₹10,700 Crores will strengthen FCI financially and reduce its dependency on short-term borrowings, lowering interest burdens. o This will result in a reduction in the subsidy provided by the Government of India.