Budget 2018: Food subsidy bill may swell by 10 pct due to rise in minimum support prices

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New Delhi | Updated: Jan 19, 2018 11:46 PM

Union budget 2018: In the upcoming Budget 2018 food subsidy bill may go up by 10 per cent to around Rs 1.60 lakh crore. This is because of the rise in minimum support prices. According to sources there will be no change in subsidised rates of foodgrains.

budget 2018, budget india 2018, budget 2018 date, budget 2018 india, budget session 2018, budget 2018 food subsidy bill, msp, minimum support price, modi budget, budget industry, budget 2017Budget 2018: In the upcoming Budget 2018 food subsidy bill may go up by 10 per cent to around Rs 1.60 lakh crore. (Image: Reuters)

Budget 2018: In the upcoming Budget 2018 food subsidy bill may go up by 10 per cent to around Rs 1.60 lakh crore. This is because of the rise in minimum support prices. According to sources there will be no change in subsidised rates of foodgrains. Over 80 crore Indians are recieving the benefits from National Food Security Act, that is effective since November 2016. Foodgrains under this scheme are provided at a highly subsidised rates of Rs 1-3 per kg every month. “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 per cent in the 2018-19 fiscal,” sources said. The total Budget 2018 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.

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The food bill is expected to rise in 2018-19 because of about 7-8 per cent 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.

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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.

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