For decades, India’s food policy has been defined by caloric sufficiency. Through the National Food Security Act, the country insulated over 800 million citizens from hunger. But across our largest public food programmes, the Public Distribution System, school meals, and Anganwadis, a rice-wheat lock-in is now yielding diminishing returns for public health. As the Finance Minister prepares to present the Union Budget 2026, there is an opportunity to strategically reallocate current spending to address persistent nutritional challenges. Recent efforts, including millet missions and expanded decentralised procurement by states, signal intent and progress, but they now need fiscal scale and nutrition-sensitive design.
Council on Energy, Environment and Water (CEEW)’s analysis of the latest National Sample Survey Office’s Household Consumption Expenditure Survey (2023-24) shows a clear imbalance in Indian diets. Of the 13 food groups recommended for a balanced diet by the National Institute of Nutrition (NIN), Indians under-consume nine, including pulses, fruits, vegetables, coarse grains, nuts, dairy products, and animal-based foods. Concomitantly, we are battling persistent undernutrition, rapidly rising obesity, and pervasive “hidden hunger” (micronutrient deficiencies like anaemia). The Indian thali is full, but it lacks nutrition.
Even at home, Indians over-consume cereals (rice and wheat), fats, oils, salt, and sugar. The real excess is likely higher because the survey does not fully account for out-of-home eating and ultra-processed foods, which are rising in household spending and often come with unchecked oil, salt, and sugar. Furthermore, we found that, in a week, a person in the lowest decile consumes just two to three glasses of milk and fruits equivalent to two bananas, compared to eight to nine glasses and eight to 10 bananas for those in the top decile. These consumption gaps mirror broader inequities in access to balanced diets.
The problem is structural: Our public food programmes and procurement architecture remain built around large-scale rice and wheat procurement and distribution, making it harder to source, store, and deliver diversified foods affordably. The Budget can recalibrate this architecture through three targeted fiscal levers. This agenda has political legs because it creates reliable demand for diversified, climate-resilient crops, thereby strengthening farm incomes and expanding opportunities for rain-fed and smallholder farmers.
Also read: Thali has gotten more expensive since 2020—2.3% of Indians can’t afford 2 veg meals a day
Three steps to take
First, the Budget should propose a ‘Public Health Cess’ on packaged ultra-processed foods high in sugar, salt, and saturated fat. This tiered, indirect tax levied on manufacturers would help curb consumption of these “negative nutrients”. At the same time, the proceeds could create a dedicated pool for child-nutrition programmes, financing the regular inclusion of diverse foods in school meals and Anganwadis. A small share, modelled on successful public health campaigns, should fund sustained public messaging that normalises diverse diets and strengthens public legitimacy for the cess. Over time, clear thresholds can also nudge manufacturers to reformulate products to avoid the levy. This creates a rebalancing mechanism: Taxing the unhealthy to subsidise the healthy for India’s children, subject to periodic review by the government and the GST Council.
Second, the Budget should allocate infrastructure funding for local, decentralised storage and primary processing units. A diversified plate requires a diversified value chain. The current Food Corporation of India (FCI) model is centralised and designed for standardisation, making it ill-suited to procure and distribute perishable vegetables, region-specific pulses, or diverse millets at scale. Financing from institutions like NABARD could support fit-for-purpose warehousing units at block- and district-level clusters without imposing a significant fiscal burden. Instead of moving crops thousands of kilometres to FCI silos, these decentralised units would enable Farmer Producer Organisations to aggregate and store produce, and Self-Helf Group federations to support local value addition, for distribution through the PDS, schools, and Anganwadis. This cuts carrying costs and boosts local economic activity by creating jobs in storage, primary processing, and aggregation.
Third, the Budget should establish a revolving working-capital window for state agencies to procure pulses, which are significantly under-consumed, quickly during harvest gluts and price dips. Central schemes exist, but without liquidity, states often miss the timing that stabilises farmer prices and builds buffers. Over time, stronger domestic procurement and buffers have reduced our exposure to import spikes during shortfalls. But even as production has risen, imports still meet roughly 15-20 per cent of pulse demand in some years. Bridging this gap is essential to support India’s Mission for Aatmanirbharta in Pulses.
The stakes are high: Progress on reducing childhood wasting and anaemia among women remains off-track, and unhealthy diets drive a growing share of India’s disease burden. Rebalancing diets at scale will require reshaping what our public food programmes procure and distribute, while also shifting incentives away from unhealthy packaged foods. Further, moving beyond rice-wheat can ease water stress and climate vulnerability, making diversification a public and environmental health investment.
The International Year of Millets (2023) was a successful branding exercise; however, systemic change requires consistent fiscal commitment. We need a “Decade of Diversifying the Indian Thali.” By moving away from a one-size-fits-all food security model toward a localised, nutrient-rich public food system, the Union Budget can help the Indian thali address the triple burden head-on. The data is clear: The Indian plate is imbalanced. The question is, is the Budget ready to rebalance it?
Ardra Venugopal is a Programme Associate and Suhani Gupta is a Research Analyst at the Council on Energy, Environment and Water (CEEW). Views are personal.
(Edited by Theres Sudeep)