Despite Centre’s allocation of free rice, Tamil Nadu’s food subsidy bill continues to go up

Despite the Centre’s free allocation of rice to States, Tamil Nadu govt.’s food subsidy bill is on the rise.

Despite the Centre making the rice allocation free to States under the National Food Security Act (NFSA), the Tamil Nadu government’s food subsidy bill is on the rise.  

For the coming financial year, an allocation of ₹10,500 crore has been made. This year, it is expected to be around ₹ 11,500 crore. During 2021-22, the bill was about ₹ 9,320 crore. 

Also Read |Centre’s free grain decision may help T.N. save ₹1,650 cr. in subsidy

In December last, the Union government announced that it would provide free grain to all NFSA beneficiaries for one year. As part of the NFSA allocation, Tamil Nadu’s share is approximately 36.77 lakh tonnes, of which the Antyodaya Anna Yojana (AAY) category gets 7.83 lakh tonnes; Priority Household (PHH) ¬ 17.76 lakh tonnes and tide over ¬ 11.18 lakh tonnes.

Generally, rice accounts for most of the allocation of food grains. The allocation of rice under the NFSA was priced at ₹3 per kg. Over and above the allocation, the State has been buying rice from the Centre under the Open Market Sale Scheme (OMSS) which is of the order of 20,000 tonnes per month. 

Initially, it was expected that the Centre’s decision might help Tamil Nadu save ₹1,650 crore in food subsidy. Besides, the transportation cost, according to a senior official of the Union government, would be borne totally by the Central government.  Yet, the food subsidy bill has shown an upward trend even for 2023-24.  

Explained | How will the free foodgrain scheme work out?