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Budget Briefs: Food Subsidy in FY 2022-23 lower by 28%, 12.3 crore excluded - Jenny Susan John, Avani Kapur, Ria Kasliwal

Accountability Initiative, Centre for Policy Research

Budget 2023-24 will be unveiled on February 1. As part of laying the context this brief, prepared by the Accountability Initiative, examines the allocation and expenditure trends for India's food subsidy.   

At the start of the current Financial Year (FY) 2022-23, Government of India allocations for Food Subsidy stood at Rs. 2,06,831 crore, which was 28 percent lower than the previous year's Revised Estimates (REs). With the additional supplementary budget of Rs. 70,065 crore, the revised allocations increased to Rs. 2,76,897 crore. These figures, however, were still lower than FY 2021-22 REs. For comparison, the food subsidy in FY 2021-22 was Rs. 2,86,469 crore. 

This decrease is despite the significant increases in foodgrain allocations since COVID-19, owing to the additional allocations made under PM Garib Kalyan Anna Yojana (PMGKAY) and other pandemic relief measures. In FY 2021-22, they reached a record high of 1,002 lakh tons, 82 per cent more than FY 2019-20.

However, coverage under the National Food Security Act (NFSA) is still measured using Census 2011 data. Using the population projections as of November 2022, only 87 per cent of eligible citizens under NFSA are covered under the scheme. Therefore, approximately 12.3 crore eligible citizens are being excluded at present.

Between April 2021 and December 2022, One Nation One Ration Card (ONORC) was accessed by 1.74 crore eligible citizens but still accounted for less than 1 per cent of total e-transactions occurring in this period. Eighty-six per cent of all interstate transactions took place in Delhi, Haryana, and Maharashtra. 

To help reduce hunger and nutrition challenges arising due to lack of access during the COVID-19 pandemic, GoI announced the PMGKAY in March 2020, providing additional foodgrains to eligible citizens free-of-cost. Since then, seven phases of the scheme have been announced, with the latest PMGKAY-VII being implemented for a period of three months from October to December 2022. In December 2022, it was announced that PMGKAY will be subsumed under NFSA, and from 1 January 2023, GoI will distribute foodgrains free-of-cost to all eligible citizens under NFSA for a period of 12 months.  

Please click here to read the brief