India's food ministry has sought more than 2 trillion rupees ($28.1 billion) to run the world's biggest food welfare programme in the fiscal year beginning April 1, three government sources said.
But the government is likely to earmark only around 1.90 trillion rupees, they said.
"The finance ministry may not be able to allocate more than 1.9 trillion rupees in the budget," one source - an official - said.
Details on the level of subsidy will be made public when Finance Minister Nirmala Sitharaman presents the 2020/21 budget on Saturday.
An inadequate allocation could force the state-run Food Corp of India, the main grain procurement agency, to borrow up to $2 billion outside of the budget, said the same official.
The finance ministry spokesman was not immediately available for comment.