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THE FOOD CORPORATIONS ACT, 1964

Title : THE FOOD CORPORATIONS ACT, 1964

Year : 1964



(1) A Food Corporation shall, before the commencement of each year, prepare a statement of programme of its activities during the forthcoming year as well as a financial estimate in respect thereof.

(2) The statement prepared under sub-section (1) shall not less than three months before the commencement of each year, be submitted for approval-

(a) In the case of Food Corporation of India, to the Central Government;

(b) In the case of a State Food Corporation, to the Food Corporation of India.

(3) The statement and the financial estimate of a Food Corporation referred to in sub-section (1) may, with the approval of the Central Government, in the case of the Food Corporation of India, or with the approval of the Food Corporation of India in the case of a State Food Corporation, be revised by the Food Corporation.



1*[(1) A food corporation may, for the purpose of carrying out its functions under this Act. -

(a) Take advances against stocks of food grains or other foodstuffs held by it, or borrow money-

(i) From any scheduled bank, or

(ii) From any other bank or financial institution approved by the Central Government in this behalf, or

(iii) From any other authority, organisation or institution or from the public on such terms and conditions as may be approved by the Central Government; or

(b) Issue and sell bonds and debentures carrying interest at such rates as may be fixed by the Central Government at the time the bonds or debentures are issued:

2*["Provided that the amount borrowed by a Food Corporation under clause (b) shall not at any tune exceed ten times the paid-up capital and the reserve fund established under section 33."]

(2) The Central Government may guarantee the loans and advances taken by a Food Corporation under sub-section (1) as to the repayment of principal and the payment of interest thereon and other incidental charges.

3*[(3) A food Corporation may, for the purpose of carrying out its functions under this Act, also borrow money from the Central Government; and that Government may, after due appropriation made by Parliament by law in this behalf, pay to the Food Corporation such sums of money by way of loan on such terms and conditions as that Government may determine.]

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1. Inserted by Act 67 of 1972, w.e.f 16.12.1972.

2. Substituted by the Food Corporation (Amendment) Act, 2001 w.e.f. 22.05.2001. Prior to its substitution the proviso read as under:

"Provided that the amount borrowed by a Food Corporation under this sub-section shall not at any time exceed ten times the paid-up capital and the reserve fund established under Section 33."

3. Substituted by Food Corporations (Amendment) Act (Act 36 of 1988) w.e.f 20.08. 1988.

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A Food Corporation may lend or advance money to any person engaged in the production of food grains upon the security of food grains or such other security as may be prescribed, for any purpose connected with such production.



(1) A Food Corporation may enter into agreement with any grower of food crops for the purchase of food grains after the harvest of such crops and any such agreement may provide that any sum payable by the Corporation to the grower under such agreement shall be payable to any scheduled bank or other financing agency nominated by the grower in this behalf to such extent as may be specified in the agreement.

(2) The scheduled bank or other financing agency referred to in sub-section (1), may, on the basis of any agreement referred to in that sub-section, lend money to a grower of food crops who has entered into such agreement.



A Food Corporation may, upon such terms and conditions as it may think fit. guarantee any loan referred to in sub-section (2) of section 29, and also any other loan raised by a grower of food crops, which is repayable within a period not exceeding five years.



(1) A Food Corporation shall have its own fund and all receipts of the Corporation shall be credited thereto and all payments of the Corporation shall be met there from.

(2) Such fund shall be applied for meeting all administrative expenses of the Food Corporation and for carrying out the purposes of this Act.



A Food Corporation may invest its funds in the securities of the Central Government or any state government or in such other manner as may be prescribed.



(1) A Food Corporation shall establish a reserve fund to which shall be credited every year such portion of its annual net profits as that Corporation thinks fit.

(2) After making provision for such reserve fund and for bad and doubtful debts, depreciation in assets and all other matters which are usually provided for by companies registered and incorporated under the Companies Act, 1956, the balance of its annual net profits shall be paid-

(a) In the case of the Food Corporation of India, to the Central Government, and

(b) In the case of a State Food Corporation, to the Central Government and the Food Corporation of India in the same proportion as the capital provided by them.



1*[(1) A Food Corporation shall maintain proper accounts and other relevant records and prepare an annual statement of accounts including the profit and loss account and the balance-sheet in such form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India.

(2) The accounts of a Food Corporation shall be audited annually by the Comptroller and Auditor-General of India and any expenditure incurred by him in connection with such audit shall be payable by the Food Corporation to the Comptroller and Auditor-General of India.

(3) The Comptroller and Auditor-General of India and any person appointed by him in connection with the audit of the accounts of a Food Corporation shall have the same rights, privileges and authority in connection with such audit as the Comptroller and Auditor-General has in connection with the audit of Government accounts and, in particular, shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any office of the Food Corporation.

(4) The accounts of a Food Corporation as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded annually by the Comptroller and Auditor-General of India to, -

(i) The Food Corporation concerned;

(ii) Where the accounts relate to a State Food Corporation, also to the Food Corporation of India;

(iii) The Central Government, and that Government shall, as soon thereafter as may be, cause the same to be laid before both Houses of Parliament.".]

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1. Substituted by the Food Corporations (Amendment) Act, 2000. Prior to substitution section 34 read as under:

"(1) A Food Corporation shall maintain proper accounts and other relevant records and prepare an annual statement of accounts including the profit and loss account and the balance sheet in such form as may be prescribed.

(2) The accounts of a Food Corporation shall be audited by auditors duly qualified to act as auditors of companies under section 226 of the Companies Act, 1956.

(3) The auditors shall be appointed annually by the Food Corporation from among a list of auditors approved by the Central Government on the advice of the Comptroller and Auditor- General of India.

(4) The auditors shall be supplied with a copy of the annual balance sheet and the profit and loss account of the Food Corporation and it shall be their duty to examine them together with the accounts and vouchers relating thereto and they shall have a list delivered to them of all books kept by the Corporation and shall at all reasonable times have access to the books, accounts and other documents of the Corporation and may require from any officer of the Corporation such information and explanations as the auditors may think necessary for the performance of their duties as auditors.

[(5) The Comptroller and Auditor-General of India shall have power-

(a) To direct the manner in which the accounts of a Food Corporation shall be audited by the auditors appointed under sub-section (3) and to give such auditors instructions in regard to any matter relating to the performance of their functions as such,

(b) To conduct a supplementary or test audit of the accounts of a Food Corporation by such person or persons as he may authorise in this behalf; and for the purpose of such audit, to require information or additional information to be furnished to any person or persons so authorised, on such matters, by such person or persons, and in such form, as the Comptroller and Auditor-General may, by general or special order,-direct.

(6) The auditors shall send a copy of their report together with an audited copy of the accounts- (a) to the Food Corporation concerned: (b) where the accounts relate to a State Food Corporation, also to the Food Corporation of India, (c) to the Central Government: and (d) to the Comptroller and Auditor-General of India who shall have the right to comment upon, or supplement the audit report in such manner as he may think fit.

(7) Any comments upon, or supplement to, the audit, report, made by the Comptroller and Auditor-General of India under clause (d) of sub-section (6) shall be placed by the Food Corporation concerned before the Central Government, and where the accounts relate lo a State Food Corporation, also before the Food Corporation of India."

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(1) A food Corporation shall, as soon as possible after the end of each year, submit to the Central Government an annual report on the working and affairs of the Corporation.

(2) The Central Government shall, as soon as may be after the receipt of such report, cause such report and the audit report received under section 34 1*[together with any comments thereon or supplement thereto by the Comptroller and Auditor General of India] to be laid before both Houses of Parliament.

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1. Inserted by Act 67 of 1972, w.e.f 15.12.1972.

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Last updated on July, 2016

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