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Pranab Mukherjee, India's finance minister, has presented his annual budget, acknowledging that food inflation is still a major concern for the second most populous country in the world.
On Monday, Mukherjee announced a food security bill for 2011 - 2012, a measure that would provide cheap grains for millions of India's poor.
However, the announcement has sparked worries of a huge fiscal cost.
In a pilot programme, the minister said some subsidies for food and fuel would be directly given as cash to customers starting in March 2011.
The move is aimed at making the subsidies system more efficient with less waste.
In addition to being popular with voters, food and fuel subsidies help offset inflation but add to India's fiscal burden.
India faces huge inflation, which has drawn criticism from the opposition.
Anger has also been rising over food supplies in the country's streets as millions go hungry, while some food supplies have been rotting in warehouses.
Deutsche Bank forecast that subsidies in the current fiscal year would reach 2.5 per cent of GDP, above New Delhi's target of 1.8 per cent.
And it expects the subsidy burden in the next fiscal year ending in March 2012 to rise to 3 per cent of GDP.
Al Jazeera's Prerna Suri reports from New Delhi.
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