Highlights The expected cost of providing free foodgrains for five years is around Rs 12 lakh crore.  Rise in procurement cost and the Central Issue Price being zero has led to an increase in the food subsidy bill. Procurement of foodgrains for NFSA is concentrated in a few states, with 92% of wheat coming from three states, and 65% of paddy coming from five states. Rice and wheat are the two main foodgrains provided under NFSA.  To support nutritional requirements, distribution of fortified rice and coarse grains are being undertaken.

The Department of Food and Public Distribution (DFPD) is responsible for ensuring food security through procurement, storage, and distribution of foodgrains, and for regulating the sugar sector.[i]  The Department is under the purview of the Ministry of Consumer Affairs, Food and Public Distribution. This note examines the budget allocation to the Department and discusses related issues.

Overview

In 2026-27, the Department has been allocated Rs 2,35,047 crore, same as the revised estimate for 2025-26 (Rs 2,35,048 crore).[ii]  Allocation to the Department accounts for 4.4% of the budgeted expenditure of the central government in 2026-27.

Table 1: Allocation to the Department of Food and Public Distribution (in Rs crore)

Head	2024-25 Actuals	2025-26 RE	2026-27 BE	% change from 25-26 RE to 26-27 BE
PMGKAY	1,99,500	2,27,754	2,27,429	-0.1%
Assistance to state agencies*	6,945	6,000	6,500	8.3%
Assistance to Sugar Mills for Ethanol Capacity	600	600	600	0%
Sugar Subsidy under PDS	367	400	200	-50%
Other	295	294	318	8%
Total	2,07,707	2,35,048	2,35,047	0%

Note: *For intra-state movement of grains and margin of fair price shop dealers.
Sources: Demand No. 15, Expenditure Budget, Union Budget 2026-27; PRS.

PMGKAY

In 2026-27, Rs 2,27,429 crore has been allocated towards the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).  This amounts to 97% of the budget allocation for the Department.

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