Prime Minister Narendra Modi’s recent announcement of the extension of the free food grains scheme for the next five years will cost the public exchequer at least ₹15,000 crore more each year, according to an official in the Union Finance Ministry.
The overall food subsidy bill is governed by the economic cost of rice and wheat, which is, in turn, influenced by factors such as the cost of procurement, storage and distribution, the official said. The additional ₹15,000 crore amount is merely the income that the Union government had received every year in the past through the sale of subsidised food grains to the States for more than 80 crore beneficiaries covered under the National Food Security Act. Under the Act, rice was supplied at the rate of ₹3 per kg, wheat at ₹2 per kg, and coarse grains at ₹1 per kg.
