India Boosts Food Corporation's Working Capital to Record ₹21,000 Crore

The Indian government has significantly boosted the working capital of the Food Corporation of India, the largest food security program, to enhance operations, reduce borrowings, and modernize the agricultural supply chain.

Dil Bar Irshad
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India Boosts Food Corporation's Working Capital to Record ₹21,000 Crore

India Boosts Food Corporation's Working Capital to Record ₹21,000 Crore

The Indian government has raised the authorized working capital of the state-owned Food Corporation of India (FCI) to an unprecedented ₹21,000 crore from the previous ₹10,000 crore. This marks the biggest hike for the FCI, which plays a critical role in the country's food security by procuring farm produce at minimum support prices and redistributing it to 800 million poor people under the National Food Security Act.

The substantial financial boost aims to enhance the FCI's operational capabilities, reduce its borrowings and interest payouts, and fund a planned modernization drive. The increased working capital will help the corporation address funding gaps, ease its interest burden, and invest in upgrading its storage facilities and transportation networks.

Why this matters: The record increase in the FCI's working capital highlights the Indian government's commitment to strengthening the country's food security infrastructure and supporting the livelihoods of millions of farmers. The move will have far-reaching implications for the efficient distribution of food grains to the poor and the modernization of India's agricultural supply chain.

As part of its modernization efforts, the FCI is implementing an integrated IT system and adopting artificial intelligence-based equipment to streamline operations and detect fraud. The government noted that these technological advancements will help reduce post-harvest losses and improve the overall efficiency of the corporation.

The FCI's increased working capital comes at a critical time as India continues to grapple with the challenges of ensuring food security for its vast population, particularly in the wake of the COVID-19 pandemic. The enhanced financial support will enable the corporation to better fulfill its mandate and respond to the evolving needs of the nation's food distribution system.

Key Takeaways

  • Indian govt raised FCI's working capital to ₹21,000 cr, a record hike.
  • Aims to enhance FCI's operations, reduce borrowings, and fund modernization.
  • FCI procures farm produce, redistributes to 800 million poor under NFSA.
  • FCI implementing IT systems, AI-based tech to reduce post-harvest losses.
  • Boost to FCI's working capital strengthens India's food security infrastructure.