Government's Food Subsidy To Balloon By Rs 35,000 Cr In FY25

ENA Sectors 2024-04-01 16:58:55 New Delhi, Apr 1 (KNN) The Indian government's food subsidy expenses for the fiscal year 2023-24 (FY24) stood at around Rs 2.2 trillion, Rs 8,000 crore more than the revised estimate. For the upcoming fiscal year 2024-25 (FY25), the food subsidy outgo is projected to increase by over Rs 35,000 crore from the budget estimate, an official source revealed to the Financial Express. According to the source, the initial projection of the food subsidy outgo by the Ministry of Food and Public Distribution for FY25 is Rs 2.42 trillion. This expected rise is attributed to the likely increase in the Minimum Support Prices (MSPs) of wheat and rice. The interim budget for FY25 had provisioned Rs 2.05 trillion under the food subsidy head. Over the last two fiscal years, the MSPs of paddy and wheat have witnessed an annual increase in the range of 5-7 per cent. The economic costs for rice and wheat for the FCI (Food Corporation of India) in FY24 are estimated to have increased to Rs 39.18/kg and Rs 27.09/kg, respectively, from Rs 35.62/kg and Rs 24.67/kg in FY22. For FY25, the economic cost of rice and wheat is currently estimated at Rs 39.75/kg and Rs 27.74/kg, respectively. In FY24, Rs 1.4 trillion under the food subsidy was routed through the FCI, and the balance Rs 80,000 crore was allocated to states following a decentralized procurement system. The additional amount over the revised estimate was necessitated by the free ration scheme, which did away with even the marginal payments by beneficiaries. The FCI itself has projected an expense of Rs 1.55 trillion under the food subsidy for FY25. The government has extended the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) or free ration scheme for five years until the end of 2028. This extension is expected to cost the exchequer around Rs 11.8 trillion due to a projected increase of 7 per cent-8 per cent in the MSPs of relevant crops like rice, wheat, and coarse grains, as well as other costs such as transportation, storage, and incidentals. Under the PMGKAY, 5 kg of rice or wheat is provided free of cost monthly to each of the 801 million beneficiaries. The food subsidy bill had skyrocketed in FY22 and FY23 due to a scheme that doubled the subsidised food grains supplies. In addition to the free grains under PMGKAY, beneficiaries under the National Food Security Act were provided foodgrains at highly subsidised rates of Rs 3/kg for rice and Rs 2/kg for wheat. (KNN Bureau) 37246 https://knnindia.co.in/news/newsdetails/sectors/governments-food-subsidy-to-balloon-by-rs-35000-cr-in-fy25 2024-04-01 16:58:55 knnindia.co.in Government's Food Subsidy To Balloon By Rs 35,000 Cr In FY25