Mohit Satyanand replied to my earlier post on Food Security Bill with a couple of comments. He mentioned that only about 40% of the beneficiaries are going to get rice while the other 60% are going to get wheat. He also pointed me to the site of the Food Corporation of India where they give the official “all in” costs of rice and wheat (Rs. 27 and Rs. 19 respectively). I still believe that the wholesale market price is a better measure of the all-in price, but it would be useful to see what the subsidy number works out to given the official government numbers on prices.
Notice that the total subsidy has now come to about 6% of the budget, which is still massive. There are of course other problems with the bill – such as distortion of markets, but those are outside the scope of this blog so I’ll stop here.