The move will help FCI improve its liquidity situation and efficiently carry out procurement operations on behalf of the govt, besides ensuring support prices to farmers.
The government on Thursday said it will restructure capital of the Food Corp. of India (FCI) to raise equity as well as long-term debt for meeting the working capital requirement.
FCI is the government’s nodal agency for procurement and distribution of food grains. The move will help FCI to improve its liquidity situation and efficiently carry out procurement operations on behalf of the government, besides ensuring support prices to farmers.
“Capital of the Food Corporation of India will be restructured to enhance equity and to raise long-term debt for meeting its standing working capital requirement,” finance minister Arun Jaitley said in his budget speech.
FCI procures wheat and rice from farmers at the minimum support price (MSP) and the food grains are distributed to over 80 crore people in the country under the National Food Security Act. Under this law, which was passed by the Parliament in 2013, the government provides 5kg of wheat and rice to per person per month at Rs2 and Rs3 per kg, respectively.
The government has raised food subsidy for next fiscal to Rs1,69,323 crore from Rs1,40,282 crore estimated in the current 2017-18 financial year.