| SUBSIDY SNAPSHOT | ||||
| Fertilizer Subsidy | FY23 | FY24 | FY25 | YoY |
| Urea Subsidy | ₹1,65,217 cr | ₹1,28,594 cr | ₹1,19,000 cr | -7.5% |
| Domestic | ₹1,25,270 cr | ₹1,02,121 cr | ₹1,00,340 cr | -1.7% |
| Imported | ₹43,407 cr | ₹30,000 cr | ₹22,634 cr | -24.6% |
| Nutrient-Based Subsidy | ₹86,122 cr | ₹60,300 cr | ₹45,000 cr | -25.4% |
| Domestic | ₹50,090 cr | ₹32,370 cr | ₹26,500 cr | -18.1% |
| Imported | ₹36,033 cr | ₹27,930 cr | ₹18,500 cr | -33.8% |
| Total Fertiliser Subsidy | ₹2,51,339 cr | ₹1,88,894 cr | ₹1,64,000 cr | -13.2% |
| Total Food Subsidy | ₹2,72,802 cr | ₹2,12,332 cr | ₹2,05,250 cr | -3.3% |
| Total Petroleum Subsidy | ₹6,817 cr | ₹12,240 cr | ₹11,925 cr | -2.6% |
| Total Subsidy | ₹5,30,958 cr | ₹4,13,466 cr | ₹3,81,175 cr | -7.8% |
Both the central and state governments acquire food grains for distribution under the Public Distribution System (PDS). The Centre engages in centralised procurement through the Food Corporation of India (FCI), while various state agencies use decentralised procurement to purchase food grains.
Through centralised procurement, FCI purchases rice and wheat from farmers at a Minimum Support Price (MSP). Subsequently, they are sold at Central Issue Prices (CIP), a government-determined rate that must be lower than the MSP.
The distribution occurs through Public Distribution System (PDS) shops and various welfare programmes.
As the CIP is lower than the MSP, the difference is made up through the annual transfer of food subsidy to the FCI.
The PDS stands as one of the most substantial welfare initiatives in the nation based on expenditure, with food subsidies constituting 5.2% of the total expenditure. It ranks among the government's top five expenditures (excluding interest payments), following defence, transportation, state transfers, and pensions.
The government, in response to a Lok Sabha query in December, disclosed that a sum of ₹1,67,875 crore has been disbursed to the Food Corporation of India (FCI), and ₹57,686 crore to states, as food subsidy between January 1 and December 15, 2023.
In November 2023, the central government extended PMGKAY, the scheme that provides free rations, for five years, which was due to expire in 2023.
The Centre may incur an additional ₹15,000 crore annually for extending the free food grain scheme, which will benefit nearly 800 million people.
