Archive · 9 Aug 2026
Finance Ministry Releases Rs 58,000 Crore Food Subsidy to FCI
The Indian government gives money to help pay for food for people who need it.
This money provides free rice and wheat to more than 800 million people through a scheme called PMGKAY.
The plan is carried out by the Food Corporation of India, which is like a giant food warehouse.
Recently, the finance ministry released over Rs 58,000 crore of this money early.
The government did this so that storing all the grain does not get too expensive.
FCI currently has about 90 million tonnes of grain stored, which is much more than the required buffer.
Buying and storing grain costs more this year, so the estimated price per kilogram has gone up.
If grain keeps piling up, the government may have to spend even more money than it planned.
The finance ministry released over Rs 58,000 crore, or 33% of the budgeted food subsidy of Rs 1.78 lakh crore for FY27, to the Food Corporation of India (FCI).
FCI holds 90.49 million tonnes of grain — 40.88 MT of rice and 49.6 MT of wheat — against a July 1 buffer requirement of 41.12 MT.
The subsidy mainly funds free rice and wheat for over 800 million people under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) free ration scheme.
FCI's estimated economic cost for 2026-27 rose to Rs 43.91/kg for rice and Rs 31.45/kg for wheat, up from Rs 42.11/kg and Rs 29.68/kg in FY26.
Against the FY27 budget estimate of Rs 2.27 lakh crore for food subsidy, actual outgo may exceed Rs 2.47 lakh crore if central pool grain stocks continue to mount.
- Who
- The Government of India's finance ministry and the Food Corporation of India (FCI).
- What
- The finance ministry released over Rs 58,000 crore, or 33% of the budgeted FY27 food subsidy, upfront to FCI to keep grain carrying costs in check.
- When
- During FY27 (2026-27), with amounts released so far in the fiscal year.
- Where
- India.
- Why
- To curb the rising economic costs of carrying surplus food grains and ease cash-flow mismatches for FCI.
- Subsidy released to FCI
- Over Rs 58,000 crore (33% of budgeted Rs 1.78 lakh crore for FY27)
- Budget estimate for food subsidy FY27
- Rs 2.27 lakh crore; actual outgo may exceed Rs 2.47 lakh crore
- Beneficiaries
- Over 800 million people under PMGKAY free ration scheme
- FCI grain stock
- 90.49 million tonnes (40.88 MT rice + 49.6 MT wheat)
- Buffer requirement
- 41.12 MT as of July 1
- Estimated economic cost 2026-27
- Rs 43.91/kg for rice; Rs 31.45/kg for wheat
- Short-term loan provision
- Up to Rs 1 lakh crore, 90-day tenure, interest 5.55%-7.4% per annum