★ The government’s food subsidy budget for FY2025–26 is likely to be 10–15% higher than the estimated ₹2.03 lakh crore for FY2024–25. The increase will mainly be driven by rising grain stocks and higher costs under the free distribution scheme.

★ The Food Corporation of India (FCI) has raised its projected expenditure for 2025–26 from ₹1.4 lakh crore to ₹1.7 lakh crore. So far, the Finance Ministry has released ₹75,921 crore (53% of the annual allocation) to the corporation, while ₹50,000 crore has been provided as Ways and Means Advances, which must be repaid by March 31, 2026.

★ Due to excess grain stocks and rising economic costs, FCI has had to take a short-term loan of ₹25,880 crore in the current fiscal year. At present, FCI holds 66.5 million tonnes of grain (35 million tonnes of rice and 31.5 million tonnes of wheat), compared to the buffer norm of 30.7 million tonnes for October 1. This figure excludes around 9 million tonnes of rice yet to be received from millers.

★ Procurement of paddy for 2025–26 has already begun at full pace, which is expected to further increase stocks. So far this year, FCI has sold a record 5.63 million tonnes of rice at subsidized rates under various schemes, including the Open Market Sale Scheme (OMSS), state allocations, ethanol production, and the ‘Bharat Rice’ initiative.

★ If large volumes of stock are not offloaded in the open market, FCI may face serious storage and operational challenges, further inflating the government’s food subsidy bill.

★ FCI distributes about 36–38 million tonnes of rice and 18–20 million tonnes of wheat annually under the free ration scheme, while procurement remains in the range of 75–80 million tonnes — leading to a continuous build-up of stocks.

★ For 2025–26, the economic cost of rice and wheat is estimated at ₹41.73 per kg and ₹29.80 per kg, respectively, higher than ₹40.42 and ₹28.50 per kg in 2024–25. These costs include the Minimum Support Price (MSP), storage, transportation, and other operational expenses, all of which are expected to rise further by year-end.