Food Subsidy Likely to Surpass Budget Estimate This Year

19-Sep-2025 08:48 PM

New Delhi. The Union Finance Minister had budgeted a provision of ₹2.03 lakh crore for food subsidy for the current financial year (April-March) 2025-26, but it appears that the actual amount of food subsidy will exceed this by approximately ₹22,000 crore.

This is due to the government significantly increasing the minimum support price (MSP) for paddy and wheat, and the Food Corporation of India (FCI) has procured more from farmers.

There are abundant stocks of rice and wheat in government warehouses, and huge amounts are being spent on their storage, maintenance, and transportation.

The pace of their withdrawal for supply under various schemes is slow. Government rice stocks are more than two and a half times the minimum required buffer quantity, while wheat stocks are also at a four-year high.

It is noteworthy that more than 70 percent of the subsidy is spent through the Food Corporation of India (FCI) alone. The Union Budget provides for a food subsidy of ₹1.40 lakh crore for the Corporation, while the Corporation estimates its actual expenditure to increase to ₹1.65 lakh crore in 2025-26. The remaining amount of food subsidy is allocated to states where decentralized procurement systems are in place for the purchase of food grains.

The Food Corporation of India's subsidy budget is expected to increase by more than 15 percent, taking the total subsidy burden under the Pradhan Mantri Garib Kalyan Anna Yojana, or Free Ration Scheme, to ₹2.25 lakh crore,

the highest level since the ₹2.72 lakh crore budgeted for 2022-23. The actual expenditure is estimated to be ₹2.25 lakh crore, a significant increase of ₹22,000 crore.