Question

In the context of agricultural price policy, when the government procures a food commodity at the Minimum Support Price and subsequently distributes it to consumers through the Public Distribution System at a price lower than the economic cost of procurement, storage and distribution, the difference between the economic cost and the issue price to consumers is generally referred to, in government accounting, as the:

Q: Answer-In the context of agricultural price policy, when the government procures a food commodity at the Mi...

The food subsidy refers to the difference between the economic cost incurred by the government in procuring, storing and distributing a food commodity, and the lower price at which it is issued to consumers through the Public Distribution System, and represents a significant fiscal commitment under Indias food security architecture.