India's food subsidy bill for FY27 could rise to around ₹2.5 trillion, exceeding the Budget Estimate of ₹2.28 trillion, driven by higher minimum support prices (MSPs) and stronger-than-expected crop procurement, Business Standard.
The official, speaking at a panel discussion during a book launch event, said the government is simultaneously working on measures to strengthen fiscal discipline and improve the efficiency of procurement and distribution systems.
"Whenever MSP increases, subsidy expenditure also rises. We are trying to put in place a more stringent framework to ensure fiscal discipline," the report said citing the official.
The comments come at a time when subsidy spending is already under pressure. Earlier this week, the Centre indicated that the fertiliser subsidy bill could nearly double to about ₹3.4 trillion in FY27 from the Budget Estimate of ₹1.7 trillion if the ongoing crisis in West Asia continues and keeps global energy prices elevated.
If both projections materialise, combined spending on food and fertiliser subsidies could rise to nearly ₹5.9 trillion in FY27, compared with the Budget Estimate of ₹3.98 trillion.
The official said wheat procurement is expected to be stronger than previously estimated, potentially reaching 35 million tonnes in FY27 compared with an earlier projection of 30 million tonnes.
Higher procurement has been supported by MSP operations in states where market prices fell below the support price, partly due to bonus announcements by state governments.
To improve transparency and ensure benefits reach genuine farmers, the government has expanded the digitisation of procurement processes. Farmers are now required to complete online registration before procurement begins, while land records have been integrated into the system to improve verification.
