Centre May Reduce Broken Rice Allocation in PDS to Boost Ethanol Output

The Centre is preparing to place a proposal before the Cabinet to lower the share of broken rice in the public distribution system (PDS) from 25% to 10%, as per PTI reports.  

The adjustment applies to food grains distributed to around 80 crore beneficiaries. The change is expected to alter the composition of rice supplied under the scheme without affecting overall allocations. 

Estimated Surplus Generation 

Reducing the proportion of broken rice could release close to 90 lakh tonnes annually. This surplus would come from the broader pool of 360-370 lakh tonnes of rice distributed each year under the PDS.  

The freed-up stock is planned to be redirected for industrial use through auctions. 

Supply to Ethanol Sector 

Reports indicated that broken rice will be supplied to ethanol producers, animal feed manufacturers and other users. A pilot covering 5 states has already been conducted.  

From the next ethanol supply cycle, distilleries will no longer receive whole grain rice from Food Corporation of India (FCI) stocks, with broken rice expected to serve as the primary feedstock. 

Background of Policy Shift 

This follows earlier supply constraints. In 2023, lower sugar output and concerns around rice availability led to restrictions on feedstock supply to distilleries.  

The revised approach is intended to ensure a more consistent flow of raw material to the ethanol sector across the year. 

Current Allocation Status 

Out of 52 lakh tonnes of FCI rice earmarked for the ongoing supply year, about 21 lakh tonnes has been lifted so far.  

Around 20 lakh tonnes remains available at subsidised rates until 30 June, after which the pricing window is expected to close. 

Ethanol Blending and Capacity 

India has increased ethanol blending in petrol to 20%, compared with 1.5% in 2013. This has contributed to foreign exchange savings of over ₹1.63 lakh crore and reduced crude oil imports by 277 lakh metric tonnes since 2014.  

Production capacity has risen from 420 crore litres in 2013-14 to nearly 2,000 crore litres at present. 

Alternative Feedstock Efforts 

Maize is being promoted as an additional feedstock, particularly rain-fed varieties. Grain-based sources, largely maize, account for about 40% of ethanol supply.  

Work is underway to develop higher-yield varieties with output of 5-6 tonnes per hectare. 

Read More: Iron Ore Imports in India Likely to Reach 7-Year High in FY26! 

Conclusion 

The proposed change is expected to reallocate surplus broken rice towards industrial use while maintaining PDS distribution levels. It also aligns grain supply with ethanol production needs. 

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