India is planning to extend its free food grains program by five years, Prime Minister Narendra Modi said on Saturday, as the government tries to shield consumers from rising prices of cereals ahead of a general election early next year.
The extension will offer relief to consumers, but it will also lead to higher government spending and require New Delhi to procure more wheat and rice from farmers to sustain the welfare program, which provides free grains to more than 800 million people.
For the latest headlines, follow our Google News channel online or via the app.
Modi confirmed the move at an election rally in Durg, a city in the central state of Chhattisgarh, where state elections are due this month.
The grains program, estimated to cost the government around 2 trillion rupees ($24.06 billion) this year, 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 period because it needs to purchase from farmers to run the program.
“Without export restrictions, local prices would rise above the government set floor prices, and they would fail to procure enough,” he added.
For the first time in eight years, India’s rice output is expected to drop this year, 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 after India, the world’s biggest rice exporter that accounts for more than 40 percent of global rice exports, curbed exports of non-basmati rice varieties in July.
India last year banned wheat exports in a surprise move after a heat wave curtailed output.
India’s wheat procurement set to fall below estimate by 20 pct as local prices riseIndia’s wheat procurement in 2023 could fall by a fifth from the initial estimate ... Economy
Oil price above $100 won’t be in ‘anyone’s interest’: Indian ministerIndia will manage if the price of oil goes above $100 per barrel even though such ... Energy
India allows exports of non-basmati white rice trapped at ports after sudden banIndia has allowed traders to ship out their non-basmati white rice cargoes sitting ... World News
India sets $1,200 floor price for basmati rice after curbing export of non-basmatiIndia has imposed a $1,200 per ton minimum export price (MEP) on basmati rice ... World News
India food official says not planning to restrict parboiled rice exportsIndia is not considering imposing any restrictions on exports of non-basmati ... World News
Rice supply faces new threat as India, world’s biggest exporter, mulls more curbsIndia, the world’s biggest rice exporter, is considering more restrictions on its ... World News
Riding India’s G20 success, Modi’s BJP party sets up for electionsThe weekend G20 summit was India’s big moment on the world stage, giving the ... World News