Food Subsidy
Expenditure Beginnerखाद्य सब्सिडी
Definition
Food subsidy is the expenditure incurred by the government to provide food grains at below-market prices through the Public Distribution System (PDS) under the National Food Security Act. FCI (Food Corporation of India) procures grains at MSP and distributes through fair price shops. The difference between procurement cost and issue price is the subsidy.
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Why Food Subsidy Matters
Understanding food subsidy is essential for anyone following government finances, preparing for competitive exams, or analysing India's economic policy. This concept directly affects how the government allocates resources and plans its fiscal strategy.
In the context of India's Union Budget 2026-27, with a total size of Rs 53.47 lakh crore, terms like food subsidy help citizens and analysts evaluate whether the government is on the right fiscal path. The numbers in the budget are only meaningful when one understands the underlying concepts.
For UPSC aspirants, food subsidy is frequently tested in both Prelims and Mains, particularly in Paper III (Economic Development). For CA and MBA students, this concept appears in public finance and macroeconomics courses.
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