The finance ministry has called a meeting with the food ministry on Thursday to review the proposal for a 10–15% increase in the food subsidy budget for FY26, over the current ₹2.03 lakh crore budget estimate. According to sources, the finance ministry has raised concerns about ₹20,000 crore of additional expenses being included under food subsidy for FY26. These costs are related to subsidised rice sales in the open market and the grain-based ethanol blending programme. The ministry suggested these expenses be kept separate from the main food subsidy, and proposed measures like cutting down excess grain stocks, raising open market sale prices, and reducing subsidised grain use for biofuel to manage costs. The major portion of the food subsidy is spent on providing free food grains to 810 million people under the National Food Security Act (NFSA). However, the economic cost of grain distribution has been rising continuously due to large surplus stocks far above buffer norms and no revision in issue prices. For FY26, the economic cost of rice is estimated at ₹41.73/kg, while the Food Corporation of India (FCI) sells it at ₹23.2/kg for ethanol producers and ₹28/kg under the Open Market Sale Scheme (OMSS). The FCI’s non-NFSA rice allocation has reached 10.6 million tonnes for FY26. The food ministry attributes these rising costs to annual MSP hikes (3–7%) and the open-ended procurement of rice and wheat, which has led to persistent surplus stocks. This has increased the overall economic cost for the FCI, including procurement, storage, and transportation, resulting in higher subsidy needs. Currently, FCI distributes 36–38 million tonnes of rice and 18–20 million tonnes of wheat every year under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). However, annual procurement remains high at 75–80 million tonnes, causing stock accumulation. As of early November, central rice stocks stood at over 44 million tonnes, more than three times the buffer norm of 10.25 million tonnes for October 1. This includes around 10 million tonnes still pending from millers. Due to these rising stock levels, FCI has revised its FY26 expenditure from ₹1.4 lakh crore (BE) to ₹1.7 lakh crore. To address the surplus, the government plans to offload a record 10 million tonnes of rice at subsidised rates this fiscal. So far, 6.1 million tonnes have already been released through open market sales, state allocations, ethanol production, and the Bharat Rice initiative. For FY26, FCI’s economic cost of rice and wheat is expected to rise to ₹41.73/kg and ₹29.80/kg, respectively, compared to ₹40.42/kg and ₹28.50/kg in FY25. The finance ministry has so far released ₹75,921 crore (53%) of the annual allocation and an additional ₹50,000 crore as temporary advance, which FCI must repay by March 2026. The remaining subsidy is routed through states with decentralised procurement systems.