{"id":21664,"date":"2022-03-25T11:30:00","date_gmt":"2022-03-25T06:00:00","guid":{"rendered":"https:\/\/idronline.org\/?post_type=article&p=21664"},"modified":"2025-06-25T22:05:02","modified_gmt":"2025-06-25T16:35:02","slug":"why-indias-food-subsidies-are-not-enough","status":"publish","type":"article","link":"https:\/\/idronline.org\/kn-in\/article\/advocacy-government\/why-indias-food-subsidies-are-not-enough\/","title":{"rendered":"Why India\u2019s food subsidies are not enough"},"content":{"rendered":"

The Centre has allocated about 5.2%<\/a> of its total budget<\/a> for 2022-23 to the country’s food subsidy programme. A crucial safety net, the food subsidy is used to protect farmers against low market prices and provide consumers with affordable food grains through the public distribution system (PDS).<\/p>

However, the food subsidy has been criticised for its inadequate coverage and leakages, and there is a need to improve the programme, experts told IndiaSpend. Our explainer examines the various ways in which food subsidies have fallen short and what can be done to make it more useful for its beneficiaries.<\/p>

How food subsidy works<\/strong><\/h3>

The food subsidy is both a consumer and a producer subsidy. It is used to buy grains from farmers at a price that makes farming remunerative and then sell the grain to poor households at lower prices, or in some cases, for free. Some part of the subsidy is also spent on maintenance and other administrative costs.<\/p>

\"What<\/a><\/div>
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Under centralised procurement, the Food Corporation of India buys rice and wheat from the farmers at a minimum support price (MSP). <\/p>\n<\/blockquote>

Both the Centre and the state buy<\/a> food grains for distribution under the PDS. The Centre buys it through the Food Corporation of India (FCI<\/a>) under “centralised procurement” and numerous state agencies buy it for the respective states as part of “decentralised procurement”.<\/p>

Under centralised procurement, the Food Corporation of India buys rice and wheat from the farmers at a Minimum Support Price (MSP)<\/a> and sells it at the Central Issue Prices (CIP)<\/a> (a lower price that is determined by the government and must be lower than the MSP) through PDS shops. Some of this grain is also used for welfare schemes (like the Mid Day Meal<\/a> programme and Scheme for Adolescent Girls<\/a>), to provide food grains to the armed forces<\/a> and also sold in the market<\/a> in lean seasons. The FCI provides<\/a> rice to the Akshaya Patra Foundation<\/a>, a charitable organisation that provides Mid Day Meals in schools in some states.<\/p>

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