The exchequer will incur an additional ₹15,000 crore year due to the free ration policy.

This is the amount that the Union government used to make by selling the States subsidized food grains; additional expenses for purchasing, storing, and distributing the grain will also need to be computed.

According to a Union Finance Ministry official, the public coffers will lose at least ₹15,000 crore annually as a result of Prime Minister Narendra Modi’s recent statement that the free food grains program would be extended for an additional five years.

The economic cost of rice and wheat, which is impacted by several aspects like procurement, storage, and distribution costs, determines the overall food subsidy bill, according to the official. The extra ₹15,000 crore is just the revenue the Union government used to get annually from the sale of food grains that were subsidized to the States for the more than 80 crore beneficiaries who were covered by the National Food Security Act. The Act stipulated that ₹3 would be paid for rice, ₹2 for wheat, and ₹1 for coarse grains per kilogram.