Subsidies and Food Security in India

Food is the most basic need of human life. For a country like India, with a population of over 1.4 billion people, ensuring that everyone has access to nutritious, affordable, and sufficient food is a big challenge. This is where food security becomes important.

At the same time, the government provides subsidies to make food, fertilizers, fuel, and other essentials affordable for the poor. Subsidies and food security are, therefore, closely linked. Without subsidies, millions of poor households cannot buy food at reasonable prices. Without food security, social and economic stability is at risk.

Understanding Subsidies

What are Subsidies?

A subsidy is financial help given by the government to make a product or service cheaper for the people.

👉 Example:

• A farmer buys fertilizer at ₹300 per bag, while the real cost is ₹1,200. The government pays the balance ₹900 as a fertilizer subsidy.
• Poor families buy rice at ₹3 per kg under the Public Distribution System (PDS), though the actual cost is higher.

📌 Note: Subsidies are meant to support poor people, promote equity, and encourage development.

Types of Subsidies in India

Type of Subsidy	Purpose	Example
Food Subsidy	Make food grains affordable	Rice/wheat at ₹3/kg under NFSA
Fertilizer Subsidy	Support farmers’ crop production	Urea subsidy
Fuel Subsidy	Reduce cost of LPG, kerosene, diesel	Ujjwala LPG subsidy
Education Subsidy	Affordable education	Mid-Day Meal Scheme
Health Subsidy	Reduce medical cost	Ayushman Bharat insurance support

📌 Remark: India spends a large part of its budget on subsidies, especially for food, fertilizer, and fuel.

Importance of Subsidies

1. Support Poor Families – Ensures access to cheap food and fuel.
2. Encourage Farming – Fertilizer and electricity subsidies help farmers grow more crops.
3. Promote Equity – Reduces the gap between rich and poor.
4. Social Stability – Prevents hunger and unrest.
5. Boost Economic Growth – Increases demand for goods and services.

Problems with Subsidies

1. Huge Burden on Government Budget – Subsidies take up lakhs of crores every year.
2. Leakages and Corruption – Benefits often don’t reach the real needy.
3. Inefficiency – Cheap electricity or water may lead to overuse.
4. Targeting Errors – Sometimes rich people also enjoy subsidies meant for the poor.

Food Security in India

What is Food Security?

According to the FAO, food security means that all people, at all times, have access to sufficient, safe, and nutritious food to live a healthy life.

👉 Three main pillars of food security:

1. Availability of food – Sufficient production and imports.
2. Access to food – People should have money or subsidies to buy food.
3. Absorption of food – Proper nutrition and health to absorb food.

📌 Example: A family may have rice available in their area, but if they don’t have enough income or subsidies, they cannot access it – leading to food insecurity.

Food Security in India – Why It’s Important

• India has the largest number of undernourished people in the world.
• According to the Global Hunger Index 2023, India ranked 111 out of 125 countries.
• Malnutrition is a major issue among children (stunting, wasting, underweight).
• Food security ensures social stability, poverty reduction, and human development.

Measures for Food Security in India

1. Public Distribution System (PDS)

• Started in 1960s.
• Distributes rice, wheat, sugar, and kerosene at cheap rates.
• National Food Security Act (NFSA), 2013 made it a legal right.

Category	Entitlement	Price under NFSA
Priority Households	5 kg food grains/person/month	Rice @ ₹3, Wheat @ ₹2, Coarse grains @ ₹1
Antyodaya (Poorest)	35 kg food grains/family/month	Same prices as above

📌 Remark: About 81 crore people (67% of population) get food through NFSA.

2. Buffer Stock and Food Corporation of India (FCI)

• FCI procures rice and wheat from farmers at Minimum Support Price (MSP).
• Maintains buffer stock to meet emergency situations like droughts.

3. Nutritional Schemes

• Mid-Day Meal Scheme: Free lunch for school children.
• Integrated Child Development Services (ICDS): Food for children and mothers.
• Poshan Abhiyaan: Reduces malnutrition.

Challenges in Food Security

1. Leakages in PDS – Food grains often diverted to black market.
2. Poor Nutrition – Focus only on rice and wheat, ignoring pulses, fruits, and proteins.
3. Climate Change – Droughts, floods affect production.
4. Rising Population – More mouths to feed.
5. Storage Losses – Lack of modern warehouses leads to food wastage.

Part 3: Link Between Subsidies and Food Security

• Food Subsidy directly ensures food security through cheap grains under PDS and NFSA.
• Fertilizer and Power Subsidy help farmers grow enough food for the nation.
• Fuel Subsidy ensures food transport at affordable cost.

👉 Example:
Without subsidy, a poor family may spend ₹1,500/month on food grains. With subsidy under NFSA, their cost reduces to about ₹200/month – leaving more money for health and education.

📌 Note: Subsidies are, therefore, not just an expense but an investment in human development.

Data and Trends

Year	Food Subsidy (₹ Crore)	Fertilizer Subsidy (₹ Crore)	Fuel Subsidy (₹ Crore)
2010-11	63,844	62,301	38,386
2015-16	139,419	72,438	27,532
2020-21	522,683	127,921	38,455
2022-23	287,194	225,220	5,813

📌 Remark: Food subsidy has increased sharply due to NFSA and free ration schemes during COVID-19. Fertilizer subsidy also rose due to rising global prices.

Way Forward

For Better Subsidy Management

1. Direct Benefit Transfer (DBT): Give subsidy directly to bank accounts to reduce leakages.
2. Targeting the Poor: Remove rich families from subsidy lists.
3. Reduce Wasteful Subsidies: Example – better pricing of electricity and water.

For Stronger Food Security

1. Diversify food basket to include pulses, millets, oilseeds.
2. Invest in cold storage, warehouses, and transport.
3. Promote nutrition awareness.
4. Tackle climate change impacts on agriculture.

Conclusion

Subsidies and food security are two important pillars of India’s welfare system. Subsidies help the poor access food, fertilizers, and fuel at affordable rates, while food security ensures that no one goes hungry.

However, subsidies also create challenges like wastage, corruption, and fiscal burden. The future goal should be to make subsidies better targeted, transparent, and sustainable.

At the same time, food security must move beyond just rice and wheat to include nutrition security, ensuring that every Indian not only eats but also eats healthy.