Govt extends programme by 3 months to December
Free food programme to cost govt over $5 billion more
Govt seen to spend about $47 bln on programme since April
Election due in Gujarat and Himachal Pradesh by end of
NEW DELHI, Sept 28 (Reuters) - India has extended a free
food programme for the poor by three months, 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, ahead
of key state elections.
The extension of the world's biggest free food programme
comes ahead of elections in Prime Minister Narendra Modi's home
state of Gujarat and Himachal Pradesh due by the year-end, where
he faces challenges from emerging regional parties - promising
power and other subsidies.
"The free food programme has helped India avert hunger
during coronavirus lockdowns, but many poor people still need
this safety net, and that's why the government has extended the
scheme," said Devinder Sharma, an independent farm and food
"But it also been extended due to impending state
elections," he said.
With the latest extension, India could spend nearly $47
billion in total for the food programme that started in April
2020 as COVID-19 relief measure.
The programme will now be extended till December,
Information Minister Anurag Thakur told a news conference on
Most economists expect India to miss its fiscal deficit
target of 6.4% of GDP for the year ending in March 2023, thanks
to government measures to fight inflation that could cost more
than $20 billion.
"We expect the fiscal deficit to modestly overshoot the
budgeted level, following the extension," Aditi Nayar, economist
at ICRA, an Indian arm of Moody's Investors Service.
The government provides families with 5 kg (11 lb) of
foodgrains each month under the programme.
The government has restricted rice exports on growing
concern about grain stocks, in addition to export curbs on wheat
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.
Thakur said there was no shortage of wheat or rice for the
($1 = 81.9210 Indian rupees)
(Reporting by Aftab Ahmed; Additional reporting by Mayank
Bhardwaj; Editing by Andrew Heavens, Clarence Fernandez and