India’s Food Subsidies Expected to Surge by 11% Over Initial Plan

In the interim budget, food and fertilizer subsidies represented about 8% of India's total planned expenditure of 47.66 trillion rupees for the fiscal year ending on March 31, 2025.

New Delhi: India is projected to spend 2.25 trillion rupees ($11.97 billion) on food subsidies this fiscal year, according to four government sources. This marks an increase of approximately 11% from the interim budget estimate announced in February, primarily due to elevated expenditures on the support price for farmers.

The nation’s total expenditure on food and fertilizer subsidies is anticipated to hit 3.88 trillion rupees, reflecting a 5% rise from the interim budget forecast presented before the election. These interim budget estimates are set to be replaced by a new budget from Prime Minister Narendra Modi’s administration, which will be presented on July 23.

In the interim budget, food and fertilizer subsidies represented about 8% of India’s total planned expenditure of 47.66 trillion rupees for the fiscal year ending on March 31, 2025. The interim budget had estimated the food subsidy bill at 2.05 trillion rupees, as per two of the sources.

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The upward adjustment in the food subsidy bill is largely attributed to an increase in the procurement price of rice and wheat from domestic farmers, one source revealed. Conversely, the government is expected to maintain its previous estimate of 1.64 trillion rupees for the fertilizer subsidy, according to two sources.

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The Ministry of Consumer Affairs, Food and Public Distribution, the Ministry of Finance, and the Ministry of Chemicals and Fertilizers have not yet responded to requests for comment.

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