The Indian government has allocated Rs 3.71 lakh crore for food and fertiliser subsidies in the 2025-26 financial year. This marks a 0.70% increase compared to the current fiscal year’s estimated spending.
Food Subsidy: A Slight Rise
For food subsidies, the government has set aside Rs 2.03 lakh crore for 2025-26. This is slightly higher than the Rs 1.97 lakh crore allocated in 2024-25, though lower than the Rs 2.11 lakh crore spent in 2023-24. The food subsidy mainly supports the distribution of essential grains at affordable prices under schemes like the Public Distribution System (PDS) and Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).
Fertiliser Subsidy: A Small Cut
The fertiliser subsidy for 2025-26 stands at Rs 1.67 lakh crore, slightly lower than the Rs 1.71 lakh crore allocated in 2024-25. In 2023-24, the government had allocated Rs 1.88 lakh crore. This subsidy helps keep fertiliser prices stable for farmers, ensuring affordable agricultural inputs to support food production.
Balancing Welfare and Fiscal Discipline
The marginal increase in total subsidies reflects the government’s focus on social welfare while maintaining fiscal discipline. The food subsidy ensures food security for millions, while the fertiliser subsidy supports farmers in managing input costs. However, with the fertiliser subsidy seeing a gradual decline, the government may be aiming for more efficient resource allocation in the agricultural sector.
As the economy grows, the subsidy structure may continue to evolve, balancing affordability, sustainability, and fiscal responsibility.
