Sharp Increase in PDS Costs Expected Next Fiscal

22-Mar-2025 11:55 AM

Sharp Increase in PDS Costs Expected Next Fiscal
- In the next fiscal year, FCI's economic cost is projected to be ₹4,173 per quintal for rice and ₹2,980 per quintal for wheat, reflecting a 17% and 21% increase, respectively, compared to FY22.  
- FCI is purchasing 76 million tonnes of rice and wheat annually, while the requirement under PMGKAY is only 56-58 million tonnes.  
- In the current fiscal, FCI sold 3 million tonnes of wheat and 1.7 million tonnes of rice in the open market, while 2.3 million tonnes of grains were allocated for ethanol production.  
- The government's food subsidy expenditure is estimated to reach ₹2.03 trillion in FY26, which is 3% higher than the revised estimate for the current fiscal.  
- If the government does not liquidate its large surplus stock of rice, the food subsidy burden could increase further in the next fiscal year.  
- FCI currently holds 50.85 million tonnes of grains, including 37.9 million tonnes of rice and 12.12 million tonnes of wheat.  
- Additionally, 30 million tonnes of rice are yet to be received from millers.  
- This stock is significantly higher than the required buffer stock of 21.41 million tonnes as of April 1.  
- Due to the rising economic cost of rice and wheat, increasing storage expenses, and higher MSPs, the government's food subsidy expenditure is likely to rise further in the next fiscal. If the surplus stock is not reduced, the financial burden will escalate even more.