Cabinet Approves ₹10,700 Crore Equity Infusion in FCI to Strengthen Food Security, Support Farmers

The FCI, established in 1964 with an initial authorized capital of ₹100 crore and equity of ₹4 crore, has experienced substantial growth in its operations.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has sanctioned a ₹10,700 crore equity infusion into the Food Corporation of India (FCI) for the financial year 2024-25. This substantial funding is intended to enhance FCI’s working capital, empower the agricultural sector, and improve farmer welfare by expanding FCI’s capacity to procure food grains at the Minimum Support Price (MSP) and stabilize food prices across the country.

Expanding FCI's Role in Food Security and Supporting Farmers

The FCI, established in 1964 with an initial authorized capital of ₹100 crore and equity of ₹4 crore, has experienced substantial growth in its operations. Over the years, its authorized capital rose significantly—from ₹11,000 crore to ₹21,000 crore in February 2023—to keep pace with its expanded role in India’s food security. The latest infusion, approved by the government, will bring FCI’s equity up by ₹10,700 crore, solidifying its financial base and bolstering its strategic transformation efforts.

FCI’s responsibilities include procuring food grains directly from farmers at MSP, maintaining food stock reserves, distributing grains to support welfare programs, and stabilizing market prices. This infusion of equity is expected to lessen FCI’s dependence on short-term loans to cover operational costs, ultimately lowering the interest expenses borne by FCI and reducing the government’s subsidy requirements for food security programs.

Strengthening Infrastructure and Modernizing Operations

Alongside the equity infusion, FCI is set to enhance its infrastructure, with investments in warehousing and storage capacity, digital tracking for grain movement, and supply chain technology. These advancements will ensure a seamless, efficient food distribution system to reach even the most remote areas, ensuring timely and effective support to farmers and improved access to affordable food supplies for the nation.

In addition to reducing FCI’s reliance on short-term borrowing, this funding aligns with the government's broader strategy of advancing technological transformation within FCI. By fortifying the operational capabilities of FCI, the government aims to achieve a more resilient food security framework and a stable market environment for agricultural goods.

Reducing Subsidy Burden and Strengthening Farmer Support

The government’s dual commitment to MSP-based procurement and substantial investments in FCI's operational capacity marks a significant move toward bolstering the nation’s agricultural backbone. This support mechanism ensures a safety net for farmers, who can rely on FCI to procure their produce at a fair price, ultimately stabilizing their incomes and mitigating risks in the agricultural sector.

Through this new equity infusion and FCI's ongoing modernization initiatives, India takes another step forward in creating a sustainable, self-reliant agricultural economy that supports both farmers and consumers, ensuring a secure and resilient food system for the country.