What is Core & Satellite strategy?

The allocation for food subsidy for the financial year 2024-25 is estimated at Rs 2.05 lakh crore, which is less than the expenditure of Rs 2.12 lakh crore in the current financial year. Presenting the interim budget for 2024-25, Finance Minister Nirmala Sitharaman, gave the estimates of food subsidy.

On one hand, while the MSP is continuously increasing, the government is also expanding the scope of the free grain scheme. In such a situation, the cut in food subsidy raises many questions.

The government procures food grains under the National Food Security Act (NFSA) and other welfare schemes. Later this grain is sold under the Public Distribution System (PDS). Food subsidy is provided to compensate for the difference between purchase and sale.

Along with this, the Finance Minister said that the fertiliser subsidy in the next financial year is estimated to be Rs 1.64 lakh crore, which is less than Rs 1.89 lakh crore in the current financial year.

The government gives subsidy on fertilisers to fertiliser companies. The government decides the maximum retail price (MRP) of urea sold in the market. Subsidy is given on the difference between their selling price and cost of production. Nutrient based subsidy is also being provided on non-urea fertilizers like DAP and MOP.