States are allocated foodgrains at subsidised rates

Solution

States are allocated foodgrains at subsidised rates under the National Food Security Act, 2013 (NFSA) and other welfare schemes. Difference between Economic Cost and Central Issue Price (CIP) at which foodgrains are issued to states are reimbursed to Food Corporation of India (FCI) as subsidy. In case of states which have adopted Decentralised Procurement Scheme (DCP), food subsidy is released to states by Government of India for quantity of foodgrains procured and distributed by them under NFSA and other welfare schemes.