(MENAFN- Live Mint) The Centre has greenlit a dual initiative aimed at strengthening India's agricultural backbone and bolstering educational access for underserved youth.
On Wednesday, the Cabinet Committee on Economic Affairs (CCEA) approved an equity infusion of ₹10,700 crore for the Food Corp. of India (FCI) to enhance food grain procurement operations. In parallel, the PM Vidyalaxmi scheme was announced, offering collateral-free education loans of up to ₹10 lakh for students from middle- and lower-income families.
The FCI infusion allocates ₹10,700 crore to meet the working capital needs of this fiscal year, as the agency contends with rising costs driven by an increase in the minimum support price (MSP) and stock volume.
This move underscores the government's commitment to farmer welfare and agricultural sector resilience, said Ashwini Vaishnaw, the railway and information and broadcasting minister, noting the broader governmental support for India's agrarian economy.
Since its founding in 1964 with an initial capital of ₹100 crore, FCI's operational scale has expanded, requiring periodic capital augmentation. Its authorized capital was raised from ₹11,000 crore to ₹21,000 crore in February 2023, and its equity increased from ₹4,496 crore in FY20 to ₹10,157 crore in FY24.
Now, the government's additional ₹10,700 crore infusion is set to strengthen FCI's financial position, reduce short-term borrowing dependency, and ultimately lower subsidies.
Driven by MSP hikes and increased stock levels, FCI's average stock holdings over the past five years have hovered around ₹80,000 crore, reaching ₹98,230 crore at the end of FY24. The capital boost will enable FCI to handle this growth more sustainably.
Simultaneously, the Union Cabinet's approval of the PM Vidyalaxmi scheme is expected to widen educational access by removing financial barriers for students.
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A component of the National Education Policy 2020, the scheme offers collateral- and guarantor-free loans up to ₹10 lakh to students accepted into top-ranking Shigher education institutions. Eligible families must have an annual income below ₹8 lakh, and the loans cover full tuition and other course-related expenses.
Vaishnaw emphasized the scheme's student-friendly, fully digital framework, designed to simplify access. The programme initially applies to institutions within the top 100 of the NIRF rankings, as well as state and central government higher education institutions ranked within the top 200. With over 860 qualifying institutions, more than 2.2 million students stand to benefit.
Under PM Vidyalaxmi, loans up to ₹7.5 lakh carry a 75% credit guarantee on outstanding defaults, encouraging financial institutions to extend educational credit. For students from families earning up to ₹8 lakh annually, a 3% interest subvention on loans up to ₹10 lakh will be available during the moratorium period.
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This benefit is expected to reach 100,000 students annually, with priority given to those from government institutions pursuing technical or professional studies. The scheme's ₹3,600 crore budget for FY25-31 anticipates assisting 700,000 new students with interest relief, minister Vaishnaw said.
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