FY26 Food Subsidy May Exceed Budget by ₹22,000 Crore, Rice Stock a Key Factor
19-Sep-2025 11:10 AM
FY26 Food Subsidy May Exceed Budget by ₹22,000 Crore, Rice Stock a Key Factor
★ The government’s food subsidy bill for FY26 is likely to exceed the budget estimate of ₹2.03 lakh crore by nearly ₹22,000 crore, taking the total to around ₹2.25 lakh crore. The main reason is the massive surplus stock of rice and wheat held by the Food Corporation of India (FCI) and the high cost of storage.
★ Currently, FCI is holding 70.4 million tonnes (MT) of grains — 37 MT of rice and 33 MT of wheat — well above the October 1 buffer requirement of 30.77 MT. In addition, another 11 MT of rice is yet to be received from millers, while the new paddy procurement season starts next month.
★ Officials have warned that unless stocks are aggressively liquidated through open market sales, FCI could face serious challenges in managing rice inventories, further inflating the subsidy bill.
★ So far this year, 4.2 MT of rice has been sold at subsidised rates through open market sales, ethanol production, and state-run special schemes. This figure is expected to surpass last year’s record offload of 4.63 MT.
★ FCI’s economic cost has also risen to ₹41.73 per kg for rice and ₹29.80 per kg for wheat in 2025-26, compared with ₹40.42 and ₹28.50, respectively, in 2024-25.
★ Experts say that rising procurement levels and ballooning grain stocks are pushing up costs, and timely liquidation of surplus stocks is the only way to ease the burden.