Updated: November 27, 2019 4:49:39 am
The Union Cabinet on Wednesday may approve a proposal to raise the authorised capital of Food Corporation of India (FCI), which will allow it to borrow more money from the market.
According to the sources, the Ministry of Consumer Affairs, Food and Public Distribution had circulated a note for raising the authorised capital of FCI from Rs 3,500 crore to Rs 10,000 crore. Once approved, FCI will able to raise more money from the market.
The move comes in the backdrop of FCI’s request for infusion of capital. Last week, Minister of State of Consumer Affairs, Food & Public Distribution Danve Raosaheb Dadarao informed Parliament that FCI had requested equity capital infusion, against which the government has decided to increase the equity capital of FCI by Rs 5,000 crore.
“As against equity infusion plan of Rs 5,000 crore, the government has already released Rs 500 crore during the Financial Year 2018-19. Release of balance Rs 4,500 crore would be considered once the Authorised Capital of FCI is enhanced from present level of Rs 3,500 crore to Rs 10,000 crore”, he said in the written reply to a question in Lok Sabha on November 19.
The FCI was setup under the Food Corporations Act 1964. It procures food grains at MSP announced by the government and supplies for the public distribution system at heavily subsidies rate.
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