In the Union Budget for the fiscal year 2025-26, the Indian government has allocated a total of ₹3.71 lakh crore for food and fertilizer subsidies, marking a slight increase of 0.70% from the previous fiscal year. The food subsidy is set at ₹2,03,420 crore, up from ₹1,97,420 crore in 2024-25, while the fertilizer subsidy is allocated ₹1.67 lakh crore, a decrease from ₹1.71 lakh crore in the current fiscal year.
On February 1, 2025, India’s Finance Minister, Nirmala Sitharaman, presented the Union Budget for the fiscal year 2025-26, allocating a total of ₹3.71 lakh crore for food and fertilizer subsidies. This allocation represents a modest increase of 0.70% compared to the current fiscal year’s estimated expenditure.
Food Subsidy Allocation
The budget earmarks ₹2,03,420 crore for food subsidies in the upcoming fiscal year, up from the revised estimate of ₹1,97,420 crore for 2024-25. This increase aims to support the Public Distribution System (PDS), ensuring the availability of essential food items at subsidized rates to the economically disadvantaged sections of society.
Fertilizer Subsidy Allocation
The fertilizer subsidy is set at ₹1.67 lakh crore for 2025-26, slightly lower than the previous year’s allocation of ₹1.71 lakh crore. This subsidy is crucial for maintaining the affordability of fertilizers, thereby supporting agricultural productivity and food security.
Implications for the Economy
The combined allocation of ₹3.71 lakh crore underscores the government’s commitment to supporting the agricultural sector and ensuring food security. These subsidies are expected to alleviate the financial burden on farmers and consumers, contributing to economic stability and growth.
The marginal increase in the food subsidy allocation reflects the government’s focus on enhancing the efficiency of the PDS and targeting assistance to those most in need. The slight reduction in the fertilizer subsidy may indicate a strategic shift towards promoting sustainable agricultural practices and reducing dependency on chemical fertilizers.
Overall, the budgetary provisions for food and fertilizer subsidies in 2025-26 are designed to balance fiscal responsibility with the imperative of supporting the agricultural community and ensuring food security for all citizens.
