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1

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1.
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2.
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, Sx +iH VxE |{i E EM *
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F O O D CO R P O R A T IO NS AC T , 1 9 6 4 WI TH S P E CI A L RE F ER E NC E TO F I NA NC E AN D
AC CO U N TS

FUNCTIONS

The Food Corporation Act, 1964 was passed b y Parliament in the year 1964 and
the Food Corporation of India came into existence in January, 1965. The
functions of the Food Corporation of India are given in Section-13 of the Act.
They are as under:
1)
to undertake the purchase, storage, movement, transport,
distribution and sale of foodgrains and foodstuffs.
2)
to promote the production of foodgrains and other food stuffs.
3)
set up or assist in the setting up of Rice Mills, Flour Mills & other
undertakings for the processing of food grains & food stuffs.
4)
Discharge such other function as may be prescribed or as are
supplemental, incidental or consequential to any of the functions
under this Act.
CAPITAL
Section 5 of the Act deals with Capital. The authorised capital of the FC I was
set at Rs. 100 crores initiall y. The Govt. of India enhanced the authorised
capital of the Corporation from Rs.1500 crores to 2500 crores. The entire
capital is to be provided b y Govt. of India.
The entire equit y capital of the FC I is to e provided b y the Govt. of India b y due
appropriation made b y Parliament. It, therefore, follows that the capital of FC I
belongs to public i.e., the tax-payer. The paid up capital at the end of
31.03.2007 is 2478.10 crores.
BORROWINGS
Section 27 of the Act deals with the borrowing powers of the FC I for the
purpose of carrying out its functions. The Corporation can borrow money from
Central Govt. or from an y of the nationalised or scheduled bank of an y financial
institution or from the public on terms & conditions as may be approved b y the
Govt. of India.
State Bank of India provides Working Capital Loan and funds to meet day to day
requirement in the capacit y bank borrowings was Rs. 15985 as on 31.3.2000.
ACCOUNTS
It has been provided under Section-34 of the Act that the Food Corporation shall
maintain proper accounts and prepare annual statements of Accounts Profit and
Loss Account and Balance sheet in such form as may be prescribed.
AUDIT
(a)

Under Section 34(2) of the Act., the accounts of the FC I shall be

audited b y auditors dul y qualified to act as auditors of companies.
The auditors shall be appointed b y the FC I from among a list of
3

Auditors approved b y the Central Govt. on the advice of

Comptroller & Auditor General.
(b)
As per section 34(5), the C&AG shall have powers:
1) to direct the manner in which the account of the Food
Corporation shall be auditors instructions in regard to an y matter
relating to the performance of their function as such:
2) to conduct a supplementary or test audit of the accounts of the
Food Corporation b y such person or persons as he may
authorised in this behalf, and for the purpose of such audit, to
obtain information or additional information to be furnished to
an y person or person so authorised, on such matters, b y such
person or persons, and in such form as the Comptroller and
Auditor-General may, b y general or special order direct.
Copies of the Audit Report together with an audited cop y of the accounts will
be sent to the Govt. of India.
BUDGET
Under Section 26 of the Act, the Food Corporation, before the commencement of
such year, shall prepare Statement of program of its activities & a financial
estimates in respect therefore for submission to Central Govt.
DELEGATION OF POWERS
It has been provided in Section-37 of the Act that the FC I may delegate to the
officers of the Corporation such of its powers and functions under the Act, as it
may deem necessary.