PDS Expenses Seen Rising Sharply in the Next Fiscal

WITH SURPLUS GRAIN stocks, periodic increases in minimum support prices (MSP), and rising transportation costs, the economic cost of handling rice and wheat for the Food Corporation of India (FCI) is projected to rise to ₹4,173 per quintal for rice and ₹2,980 per quintal for wheat in the next fiscal—a sharp increase of 17% and 21% compared to FY22.

- SANDIP DAS

This implies a relentless rise in food subsidy, given that issue prices of the grains under the National Food Security Act (NFSA) remain unchanged.

Sources told FE that FCI's economic cost—which includes MSP, storage, transportation, and other expenses—has been steadily increasing since FY22 as the government continues open-ended procurement of food grains.

The annual procurement far exceeds the requirement under the free ration scheme (Pradhan Mantri Garib Kalyan Anna Yojana or PMGKAY) and the buffer stock norms.

In FY26, economic costs are projected to rise by 3.2% for rice and 4.5% for wheat, compared to the current fiscal.