Business, Economy & Banking Current Affairs - 2020

Business, Economy and Banking in Current Affairs 2019 with latest news and current affairs in Agriculture, Industry, Banking, Capital Markets, Import and Export and Government schemes in commercial sector.

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Authorised capital of Food Corporation of India increased to Rs.10000 cr from Rs.3500 cr

Cabinet Committee on Economic Affairs (CCEA) approved increasing authorized capital of Food Corporation of India (FCI) from existing Rs.3,500 crore to Rs.10,000 crore. CCEA was chaired by Prime Minister Narendra Modi.

Key Highlights

FCI’s operations require maintaining perpetual stock of foodgrains which needs to be funded by government of India through equity or via long term loan. Therefore, Centre government is providing equity to FCI for maintaining stocks. As on 31 March 2019, the present authorized equity capital of FCI is Rs.3,500 crore and paid up equity capital is Rs.3447.58 crore.

Significance: With the increase of authorized capital, additional equity capital can be infused in Food Corporation of India (FCI) through Union Budget for funding foodgrains stock, perpetually held by FCI. This will reduce thereby FCI’s borrowings, save FCI’s interest cost as well as reduce food subsidy in consequence.

About Food Corporation of India (FCI)

It was constituted under Food Corporations Act, 1964, to implement the objectives of National Food Policy of Government of India. FCI is a government-owned corporation under Department of Food and Public Distribution of Union Ministry of Consumer Affairs, Food and Public Distribution.

FCI Objectives: to ensure food security of Nation; to ensure Minimum Support Price (MSP) to farmers; to maintain buffer stock of foodgrains; distribution of foodgrains under National Food Security Act (NFSA); and execution of government policies and welfare schemes.

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Cabinet approves loan waiver of worth Rs.4 Cr against Sikkim Mining Corporation

Cabinet Committee on Economic Affairs (CCEA) has approved waiver of repayment of loan and interest thereon, of nearly worth Rs.4 crore outstanding against Sikkim Mining Corporation (SMC) including interest accrued on total amount from 1 April 2019, till this approval outstanding against SMC. CCEA is chaired by Prime Minister Narendra Modi.

Benefit: Further, accumulation of interest on principal loan will get extinguished and liquidation process of Corporation will get completed.

About Sikkim Mining Corporation (SMC)

It was established on the 27 February 1960 as Joint Venture (JV) undertaking of Government of Sikkim and Centre Government. SMC has been incurring losses every year since its inception.

Background: To optimise the financial health of SMC, a Consultant was engaged in 1999 which among other things suggested diversification of Corporation’s activities and also strengthening of technical staff in conjunction with cutting down of excess manpower at lower levels. However, in 2003, keeping in view the recurring losses incurred by SMC, recommendation of Accountant General of Sikkim as well as advice tendered by erstwhile Planning Commission both partners of JVC (State & Central Government) engaged a Consultant to spell out a road map for SMC’s future. Then on the basis of Consultants’s report & 107th Report of Public Accounts Committee (PAC) of State Legislative Assembly of Sikkim, State and Central Governments decided to close down SMC’s mining operations and to settle all its dues and liabilities. Consequently, SMC’s mining operations at Bhotang and Phachey Khani mines were closed down with effect from 1 January 2007. Liabilities towards employees of corporation were settled from amount release by erstwhile Planning Commission and Ministry of Development of North Eastern Region. Liabilities of the Corporation towards State Government of Sikkim were waived off by State Government of Sikkim and amount accrued from sale of scraps of machineries of corporation was returned to Government of India.

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