Free foodgrain schemes to add Rs 1.49 Lakh Cr to govt's subsidy burden

The government pays a subsidy of about Rs 1.70 lakh crore annually for cheap grains to 810 million ration card holders under the National Food Security Act (NFSA), which offers poor people 5 kg foodgrains per person per month at highly subsidised ...

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NEW DELHI: The government will have an additional subsidy burden of Rs 1.49 lakh crore for free foodgrain schemes, which may add to the Food Corporation of India’s debt that stood at Rs 3.3 lakh crore at the start of this financial year.

“Government will provide subsidy either through budgetary support or ask the FCI to raise money through bond sale or through cheaper loans from the National Small Savings Fund (NSSF) or other financial institutions under the sovereign guarantee,” said a government official, who did not wish to be identified.

The government pays a subsidy of about Rs 1.70 lakh crore annually for cheap grains to 810 million ration card holders under the National Food Security Act (NFSA), which offers poor people 5 kg foodgrains per person per month at highly subsidised rates.


Prime Minister Narendra Modi extended the PM Garib Kalyan Ann Yojana (PMGKAY) from the initial three months starting from April to eight months ending in November. The scheme provides for 5 kg of rice or wheat per month per person and 1kg of chana per month per family free of cost to NFSA beneficiaries over and above their regular entitlement through the public distribution system.
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