20% hike in food subsidy in election year budget?

NEW DELHI: It's election year and the interim budget may hike the food subsidy bill to an all time high of Rs 1.80 lakh cr, which will also mark a 20% hike in allocation from last year. ET Now learns from government sources that this allocation was initially sought by the food ministry, and the finance ministry seems to find merit in the 20% hike and is keen on such an announcement being made in the interim budget.

"There has been a steep hike in the minimum support price for several crops this year, and that is why the budgetary allocation needs to be increased considerably," the government official said.

The Centre started implementing the National Food Security Act in November 2016, under which foodgrains are supplied to over 80 crore people every month.


The finance ministry is believed to be studying the larger impact of a higher subsidy allocation on the fiscal math.

Last year the allocation for the food subsidy was Rs 1.4 lakh cr and for the previous year ie 2017-18 it was Rs 1.1 lakh cr.

In addition to this subsidy worth Rs 1.80 lakh cr, the food ministry has sought another R 20,000 cr for storage, warehousing and other purposes. In the Fnancial Year 2018-19 the food ministry had been allocated Rs 1.74 lakh cr.