India extends free food programme by three months


FE Team | Published: September 28, 2022 18:27:23 | Updated: September 29, 2022 13:51:29


Labourers move a cart loaded with rice bags inside a food processing unit, which was reopened after weeks-long shutdown to slow the spread of coronavirus disease (COVID-19), on the outskirts of Ahmedabad, India, Apr 20, 2020.REUTERS

India has extended by three months its free food programme for the poor, a move that will add $5.46 billion to the government's costs and make for a bigger challenge to efforts to rein in the fiscal deficit, reports Reuters.

Most economists expect India to miss its fiscal deficit target of 6.4 per cent of GDP for the year ending in March 2023, thanks to government measures to fight inflation that could cost more than $20 billion.

India has spent about $43 billion since April 2020 on the programme to give families 5 kg (11 lb) of foodgrains each month.

It will now be extended till December, Information Minister Anurag Thakur told a news conference.

The government has restricted rice exports on growing concern about grain stocks, in addition to export curbs on wheat and sugar.

Wheat stockpiles at state-run agencies fell to 24.82 million tonnes by Sept. 1 from 51.78 million a year ago as government purchases from farmers more than halved this year.

Rice stocks stood at 35.36 million tonnes at the beginning of this month, down from the last year’s 38.73 million.

The free food programme is expected to require an outflow of 12.2 million tonnes of foodgrains, the government has said.

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