Annual saving of Rs 2,161 crore from Govt decision to supply better quality rice with less broken grain

New Delhi: The Government's decision to supply better quality rice with less broken grains through ration shops will be rolled out in phases across all states for smooth transition and the move will help in annual cost reduction of Rs 2,161 crore.

On Wednesday, the Cabinet Committee on Economic Affairs (CCEA) decided to upgrade the quality of rice distributed to over 80 crore people through ration shops by reducing the percentage of broken rice in the overall supplies.

Follow The PSUWatch Channel on WhatsApp

In a post on X, Union Food and Consumer Affairs Minister Pralhad Joshi had informed that the Cabinet has decided to reduce the limit of broken rice supplied through ration shops.

Rice bags will be tagged with QR-code to ensure traceability, he had said. The transportation, storage and handling cost will reduce.

For raw rice, the limit has been reduced to 10 percent from 25 percent. For par-boiled rice, the percentage has been cut to 5 percent from 16 percent.

In a statement on Thursday, the food ministry said the CCEA has approved a landmark reform to improve the quality of rice supplied under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) and other welfare schemes.

The reform envisages QR-code tagging of rice bags to enable end-to-end traceability across the supply chain. This will strengthen transparency, accountability and inventory management in the PDS, while effectively plugging leakages.

"For the first time in nearly three decades, the government has revised the quality specifications of rice supplied under the Public Distribution System (PDS) ensuring that beneficiaries receive rice with substantially lower broken grain content while maintaining their existing entitlements," it added.

Through PMGKAY under the National Food Security Law, the government distributes 5kg of foodgrains (rice and wheat) per person per month free of cost. Those covered under Antyodaya Anna Yojana (AAY) category get 35 kg per month per family.

Under the approved policy, the ministry said the raw rice supplied under PMGKAY will contain up to 10 percent broken grains, replacing the existing specification of up to 25 percent.

Par-boiled rice will contain up to 5 percent broken grains, replacing the existing specification of up to 16 percent, it added.

"Procurement of improved-quality rice will commence immediately and will be rolled out across all procuring states by the Kharif Marketing Season (KMS) 2027–28 in a phased manner," the ministry said.

The distribution of improved-quality rice under PMGKAY and other schemes will be undertaken in a phased manner, ensuring a smooth transition to revised specifications across all states.

Under the revised specifications, the broken rice generated during milling will be separated and utilised productively for other purposes.

Follow PSU Watch on LinkedIN

Regarding fiscal and operational gains, the ministry said the reform is expected to lead to rationalisation of transportation, storage and handling costs, as broken rice will be auctioned directly from millers’ premises.

Jute bag requirements will also reduce, with broken rice being stored in HDPE bags.

"This is expected to lead to annual cost rationalisation of Rs 2,161 crore through reduced logistics, storage and packaging cost. In addition, the sale of broken rice will generate additional revenue, further helping to reduce the food subsidy burden," the Ministry said.

The proposal has already been validated through pilot implementation in multiple states like Haryana, Andra Pradesh, Punjab, Odisha, Telangana and Chhattisgarh. The pilot has demonstrated the operational feasibility of producing improved-quality rice at scale.

Following the Cabinet approval, the improved-quality rice generated under the pilot will be supplied to beneficiaries under PMGKAY and other welfare schemes.

(PSU Watch is India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy. 👉 Click to join our channel now: PSUWatch WhatsApp Channel. Prefer LinkedIn? Follow PSU Watch on LinkedIN. Click to stay connected on Twitter here and stay updated)