India to extend free food grain programme by 5 years, says Modi
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For the first time in eight years, India’s rice output is expected to drop this year.
PHOTOS: REUTERS
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MUMBAI - India is planning to extend its free food grain programme by five years, said Prime Minister Narendra Modi on Saturday, as the government tries to shield consumers from the rising prices of cereals ahead of a general election early in 2024.
The extension will offer relief to consumers, but it will also lead to higher government spending and will require New Delhi to procure more wheat and rice from farmers to sustain the welfare programme, which provides free grain to more than 800 million people.
Mr Modi confirmed the move at an election rally in Durg, a city in the central state of Chhattisgarh, where state elections are due in November.
The grain programme, estimated to cost the government around two trillion rupees (S$32.6 billion) in 2023, was due to expire at the end of the year.
India, the world’s second-largest producer of wheat and rice, has restricted exports of both cereals to curb rising prices at home.
A Mumbai-based dealer with a global trade house said the government would be forced to keep export restrictions in place for a longer time as it needs to buy from farmers to run the programme. “Without export restrictions, local prices would rise above the government-set floor prices, and they would fail to procure enough.”
For the first time in eight years, India’s rice output is expected to drop in 2023, raising the prospect that New Delhi will extend curbs on exports of the grain to keep a lid on food prices ahead of elections.
Global rice prices jumped to a 15-year high
India banned wheat exports in 2022, in a surprise move after a heatwave curtailed output. REUTERS
