Food subsidy bill may swell by 10% in 2018-19 Budget

New Delhi: The Centre's food subsidy bill is likely to go up by 10 percent to around Rs 1.60 lakh crore in the 2018-19 budget due to rise in minimum support prices but no change in subsidised rates of foodgrains, sources said.

The 2018-19 Union Budget will be presented on February 1.

Since November 2016, the government is implementing the National Food Security Act, under which foodgrains are supplied every month at a highly subsidised rates of Rs 1-3 per kg to over 80 crore people in the country.

"For the 2017-18 fiscal, the government has earmarked Rs 1,45,338 crore for food subsidy. This is likely to increase by at least 10 percent in the 2018-19 fiscal," sources said.

The total budget allocation for the food ministry is also expected to increase to Rs 2.20 lakh crore (inclusive of food subsidy) in the next fiscal from Rs 1.96 lakh crore in this year, the sources added.

The food bill is expected to rise in 2018-19 because of about 7-8 percent increase in the minimum support price (MSP) of rice and wheat, which are supplied to the poor at subsidised rates via ration shops.

Also, the Centre has decided not to hike the issue price of wheat and rice, which at present is Rs 2/kg and Rs 3/kg, respectively, at least till June 2018, the sources said.

"The issue price is likely to be kept unchanged in 2018- 19 and therefore the total food bill will increase. The government will bear the subsidy burden," the sources said.

Sources also said that the focus of the food ministry in the next fiscal would be on making ration shops portable within a district initially and later within a state.

This will help beneficiaries buy subsidised grain in any of the ration shop located in a district. Also, the ongoing programmes of computerising the public distribution system (PDS) will continue next year.