The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved the increase in authorized capital of the Food Corporation of India (FCI) to Rs 10,000 crore from existing Rs 3,500 crore. The CCEA meeting was chaired by Prime Minister Narendra Modi.

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With the increase of authorized capital, additional equity capital can be infused in FCI through the Union budget to fund food grains stock. The move will reduce the FCI’s borrowings, save interest cost, and reduce food subsidy as a consequence.

The operations of FCI require maintaining perpetual stock of food grains funded by the government of India through equity or long term loans. Its primary objective is to ensure minimum support price (MSP) to farmers for their crops, maintain buffer stock of food grains and their distribution under National Food Security Act and other welfare schemes of the government of India.

The FCI was constituted under the Food Corporations Act, 1964, to implement the Union government's food policy. The present authorized equity capital of FCI is Rs 3,500 crore and paid up equity capital as on March 31, 2019 stood at Rs 3,447.58 crore.