Govt approves Rs 10,700 cr equity infusion in FCI, PM Vidyalaxmi scheme also gets nod

New Delhi, Nov 6 (Mayank Nigam) The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi on Wednesday approved fresh equity infusion of Rs 10,700 crore in Food Corporation of India (FCI) by way of conversion of ways and means advance to equity in the current fiscal 2024-25. The decision is aimed at bolstering the agricultural sector and ensuring the welfare of farmers nationwide. FCI resorts to short term borrowings to match the gap of fund requirement. The fresh equity infusion will help it lower the interest burden and ultimately reduce the subsidy of the Government of India.

“In our food procurement system, FCI has a very big role. It was decided today to further strengthen FCI. In the last 10 years, foodgrain procurement has significantly increased and MSP (minimum support price) has also increased multi-fold. As a result, the scale of FCI’s operations has increased substantially,” said Union Information and Broadcasting Minister Ashwini Vaishnaw while briefing media on Cabinet decisions here today. He further said, “If we look at the average stock value which is with FCI at the end of any year is about Rs 80,000 crore. If we see the stock value of FCI for the year ended March 2024, the FCI had a stock of about Rs 98,000 crore.

That means the scale of FCI has increased significantly. In order to cater to this enhanced scale, authorised capital of FCI in February this year was increased from Rs 10,000 crore to Rs 21,000 crore. Today, the Cabinet decided to infuse fresh equity capital of Rs 10,700 crore so that FCI will be able to do much more than what it has been doing.” The equity of FCI was Rs 4,496 crores in the financial year 2019-20 which increased to Rs 10,157 crores in the Financial Year 2023-24. The Cabinet also gave its nod to the PM-Vidyalaxmi scheme to provide financial support to meritorious students so that financial constraints do not prevent anyone from pursuing quality higher education. Under the scheme, students having annual family income upto Rs 8 lakhs shall be eligible to get 3% interest subvention for education loans upto Rs 10 lakhs. “Loans upto Rs 7.5 lakhs shall be eligible for credit guarantee of 75% of outstanding default,” I&B Minister Vaishnaw said. An official release said that PM Vidyalaxmi will build on the scope and reach of initiatives taken over the last decade for maximizing access to quality higher education for the youth.

“Under the PM Vidyalaxmi scheme, any student who gets admission in quality Higher Education Institution (QHEIs) will be eligible to get collateral free, guarantor free loan from banks and financial institutions to cover full amount of tuition fees and other expenses related to the course,” it said. The scheme will be applicable to the top quality higher educational institutions (HEIs) of the nation, as determined by the National Institutional Ranking Framework (NIRF rankings) – including all HEIs, government and private, that are ranked within the top 100 in NIRF in overall, category-specific and domain specific rankings; state government HEIs ranked in 101-200 in NIRF and all central government governed institutions. The official statement said that under the PM Vidyalaxmi scheme, interest subvention support will be given to one lakh students every year. “Preference will be given to students who are from government institutions and have opted for technical/professional courses. An outlay of Rs 3,600 crore has been made during 2024-25 to 2030-31, and 7 lakh fresh students are expected to get the benefit of this interest subvention during the period,” it said.