Deliberations on Measures to Control Food Subsidies

16-Jan-2026 01:29 PM

New Delhi. The scope of food subsidies, including the massive procurement of various agricultural products at Minimum Support Price (MSP) and the free ration distribution scheme, is continuously expanding, putting immense pressure on the exchequer or government treasury.

The central government is now seriously considering various measures and methods to control food subsidies. According to analysts, since the Prime Minister himself announced the continuation of the scheme to distribute free rations to more than 800 million beneficiaries under the National Food Security Act through the Pradhan Mantri Garib Kalyan Anna Yojana until 2029, any change in it is unlikely.

Similarly, the procurement of paddy and wheat from farmers at MSP will also continue because it is essential to have sufficient stock of food grains (rice and wheat) in the central pool to ensure national food security.

The Union Budget for the financial year 2025-26 had allocated ₹2.03 lakh crore for food subsidies, while several proposals have emerged to meet the additional requirements for the financial year 2026-27. How to manage this is a question under consideration, and efforts are being made to find a solution.

According to official sources, this additional bill is approximately ₹25,000 crore, while the food subsidy bill for the next financial year is expected to increase by only ₹5,000 crore. Thus, managing the additional ₹20,000 crore in subsidies remains a matter of concern for the government.

If the sale of rice and wheat under the Open Market Sale Scheme increases significantly, the government could earn some additional revenue.

The government may try to increase the sale of food grains under this scheme. Similarly, steps could be considered to increase the retail sale of Bharat brand rice and to encourage state governments to lift more rice from the central pool.