 "CCEA approves infusion of Rs 10,700 cr equity in FCI for working capital")
The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved an equity infusion of Rs 10,700 crore in the state-owned Food Corporation of India (FCI) to boost its working capital requirements for the current financial year (FY25).
The equity has been infused by converting the Ways and Means Advance into equity. A Ways and Means Advance (WMA) is a temporary loan given by the government to the FCI to meet mismatches in government receipts and payments. The FCI must repay the WMA by March 31 of the same financial year.
The interest rate for the loan is the same as the weighted average rate of interest for 364-day Treasury Bills for the relevant financial year.
"Now, the Government of India has approved a significant amount of equity of Rs 10,700 crore for FCI which will strengthen it financially and will give a big boost to the initiatives taken for its transformation," said a statement.
The FCI is the government's nodal agency for procurement and distribution of foodgrains. It started its journey in 1964 with an authorised capital of Rs 100 crore and equity of Rs 4 crore.
Operations of the FCI increased manifold over the years, resulting in an increase of authorised capital from Rs 11,000 crore to Rs 21,000 crore in February 2023. The equity of FCI was Rs 4,496 crore in FY20, which was increased to Rs 10,157 crore in FY24.