The annual food subsidy bill crossed the Rs 50,000 crore-mark as the government announced plans to implement the promised Rs 3 per kg of foodgrain scheme to below poverty line (BPL) families.
The subsidy is provided in the budget of the food and public distribution department to meet the difference in cost of procurement of wheat and paddy
from farmers and selling it at a lower rate at fair price shops.
The subsidy is provided to Food Corporation of India, the main government body responsible for procurement and distribution of foodgrains under targetted public distribution system and other welfare schemes and for maintaining the buffer stock of foodgrains as a measure of food security.
In 2008-09 the food subsidy bill stood at Rs 43,627 crore.
Officials said efforts are on to persuade all states to move to a decentralised state-driven procurement and distribution system to enable a reduction in the food subsidy bill. Under this scheme, the Centre passes the subsidy directly to the states.
Currently 11 states — Uttar Pradesh, Madhya Pradesh, Chhattisgarh, West Bengal, Uttarakhand, Tamil Nadu, Andaman and Nicobar Islands, Orissa, Gujarat, Kerala and Karnataka have decided to procure foodgrains from within the state and distribute it through the public distribution system.