Under the plan, which still needs to be approved by the upper house, 800 million poor people would receive 11 lbs of cheap grain every month.
Its backers argue it is a big step towards eradicating the widespread hunger and malnutrition plaguing India.
But critics say it is a profligate plan which will hurt India’s economy.
The ambitious legislation will cost 1.3 trillion rupees ($23.9 billion) a year.
The government launched the programme last week by executive decree, but requires parliamentary approval to make it permanent.
In a rare speech to parliament on Monday, Congress party President Sonia Gandhi urged lawmakers to clear her party’s flagship welfare scheme, which she said was part of an “empowerment revolution” worthy of unanimous support.
“Some people ask – do we have the resources for such a legislation? I would like to say, the question is not about resources; we will have to manage resources for this,” Sonia Gandhi said.
“The question is not if we can do this. We have to do this,” she told lawmakers in the lower house.
India accounts for a third of the world’s poor and supporters say such assistance will help reduce poverty and hunger.
But critics have dismissed the bill as a political gimmick ahead of next year’s general election.
“It’s not food security, but a vote securing bill,” opposition BJP MP Murli Manohar Joshi said in parliament before Sonia Gandhi spoke.
The bill proposes to provide a kilo of rice at three rupees, wheat at two rupees and millet at one rupee.
The measure will apply to 75% of Indians living in rural areas and 50% of the urban population.
The bill was an election promise made by the governing Congress party and its implementation is expected to help the party in general elections due next year.
But it has had a rocky journey through the legislative process. Last month, the cabinet passed the measure as an ordinance using special constitutional powers to enable President Pranab Mukherjee temporarily to sign it into law.
But parliamentary approval is needed before 6 September – when the current session of parliament ends – for it to remain lawful.
Opposition parties criticized the government for passing the measure as an ordinance, after initially failing to win parliamentary support.
Despite impressive economic growth in recent years, India still struggles to feed its population and has more malnourished children than any other country in the world.
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