Sunday, 14 Sep, 2025
At present, the Food Corporation of India (FCI) has 22.5 MT (rice) and 24 MT (wheat) stocks against the buffer stock norms of 10.2 MT (rice) and 20.5 MT (wheat) for October 1. Photo credit: IANS
Due to the extension, there is a fear that rice stocks may plunge below the buffer for the first time in at least two decades by the end of this financial year.
No doubt the extension will benefit poor and marginalised section of the society, but it will add additional stress to the food buffer stocks. Due to the extension, there is a fear that rice stocks may plunge below the buffer for the first time in at least two decades by the end of this financial year.
At present, the Food Corporation of India (FCI) has 22.5 MT (rice) and 24 MT (wheat) stocks against the buffer stock norms of 10.2 MT (rice) and 20.5 MT (wheat) for October 1. This excludes 9.5 MT of rice receivable from millers. The rice stocks are better placed. However, the wheat stocks would be hovering just near to the buffer norm of 13.8 MT for January 1, after the extension of PMGKAY till December 31, 2022. Procurement of wheat for the next season (2023-24 season) would commence from April 1.
One of the reasons for low wheat stocks is a fall in procurement. For the year 2022-23, a total of 187.93 LMT of wheat is procured as per the latest data on the FCI portal. This is only about 43% of the procurement of wheat in the previous season. Since 2010-11, this is the least procurement for wheat. The fall in procurement is observed across all the major states.
No doubt the extension will benifit poor and marginalised section of the society, but it will add additional stress to the exchequer. Already, the country's subsidy bill has inflated due to fueling global food prices post the pandemic and high domestic demand. In the 2020-21 revised estimate, the government's spending on food and fertiliser subsidy stood at 556,565 crore. Both the subsidies absorbed more than 15 percent of the total budget. The same trend continued the following year as well.
Out of the total subsides, the food subsidy consumes more than half of the subsidy bill.
In its revised budget estimate for the 2021-22 fiscal, the government pegged total subsidies to be at Rs 4,33,108 crore. Although this was lower than 2020-21 spending, but it was still higher than the pre-pandemic era. Out of these, a little over Rs 2.70 lakh crore is kept for food subsidies while about 1.62 lakh crore has been allocated for fertliser subsidies.
However, both the components are set to overdue their budgeted estimates. The finance ministry, in May, declared an additional fertiliser subsidy of Rs 1.10 lakh crore for the present year. It is estimated that the fertliser subsidy figure could cross Rs 2.25 lakh crore in 2022-23. Now, with the extension of PMGKAY, the food subsidy is also going to inflate.
