The Indian government will be releasing Rs 2.97 lakh crore more food subsidy in the remaining two months of the current financial year that ends on 31 March 2021, as it looks to clear all previous backlogs, the food ministry said on Friday.
The ministry also said that states such as Punjab and Haryana will compulsorily have to use electronic modes to pay crop price (MSP) to farmers.
While the usage of electronic modes to transfer the minimum support price (MSP) to farmers is to check diversion and avoid delays, the new system would not end the current practice of crop procurement through mandis and middle-men called Arthiyas, the ministry said.
The government sells foodgrains at huge subsidy under the National Food Security Act (NFSA) and other welfare schemes. Under the food law, the Centre provides 5 kg of wheat and rice per month per person to over 80 crore people at Rs 2-3 per kg.
"Government has released a record Rs 1,25,217.62 crore this year and Rs 2,97,196.52 crore more will be released during this financial year towards food subsidy of which Rs 1,16,653.96 crore is reflected in PFMS towards Punjab," the statement said.
PFMS refers to the Public Financial Module System.