The Food Corporation of India (FCI) is a statutory body and a Public Sector Undertaking under the Ministry of Consumer Affairs, Food and Public Distribution. It was established on January 14, 1965, under the Food Corporations Act, 1964, to implement the National Food Policy. The FCI was created against the backdrop of major grain shortages and an inefficient food distribution system, with the goal of transforming a crisis-management approach into a stable food security system.
The primary mechanism of the FCI is outlined in the Food Corporations Act, 1964, which mandates it to undertake the purchase, storage, movement, transport, distribution, and sale of food grains and other foodstuffs. It ensures effective price support operations by procuring food grains like wheat and rice from farmers at the Minimum Support Price (MSP), thereby safeguarding their interests. The FCI maintains a satisfactory level of operational and buffer stocks in the Central Pool to mitigate shortages and stabilize food prices.
The FCI is the backbone of the Public Distribution System (PDS) and is instrumental in implementing the National Food Security Act, 2013 (NFSA), which entitles approximately 80 crore beneficiaries to highly subsidized food grains. It works closely with the Commission for Agricultural Costs and Prices (CACP), which recommends the MSP.
In terms of recent changes, the Food Corporations Act, 1964, was amended in 2023 to omit certain penal provisions under Section 41. Furthermore, the government approved an increase in the FCI's authorized capital from Rs 3,500 crore to Rs 10,000 crore in 2019 to reduce its borrowings and interest costs. The government also approved an infusion of Rs. 10,700 Crore in equity for FCI's working capital for FY 2024-25.