India to Extend Free Food Grains Program for Five More Years, Announces Prime Minister Modi

by Ella

NEW DELHI (Reuters) – Prime Minister Narendra Modi revealed on Saturday that India is planning to extend its free food grains program for an additional five years. This decision comes as the government seeks to shield consumers from surging cereal prices in anticipation of an upcoming general election early next year.

While this extension will provide much-needed relief to consumers, it will also result in increased government spending and require New Delhi to procure more wheat and rice from farmers to sustain the welfare program, which presently serves over 800 million people.


Modi confirmed this development during an election rally held in Durg, a city located in the central state of Chhattisgarh. State elections are scheduled for this month in Chhattisgarh.


The government’s grains program, estimated to cost around 2 trillion rupees ($24.06 billion) this year, was initially set to expire at the end of the current year.


India, the world’s second-largest producer of wheat and rice, has previously imposed restrictions on the exports of these grains to control rising prices domestically.


A Mumbai-based dealer representing a global trade house expressed the view that the government may be compelled to extend export restrictions for a longer duration, as it needs to continue purchasing grains from farmers to maintain the welfare program.

He added, “Without export restrictions, local prices would surpass the government’s set floor prices, and they would struggle to procure an adequate supply.”

For the first time in eight years, India’s rice production is expected to decline this year, potentially leading to New Delhi extending restrictions on rice exports to keep food prices in check ahead of the upcoming elections.

Global rice prices surged to a 15-year high after India, the world’s leading rice exporter, accounting for over 40% of global rice exports, imposed export restrictions on non-basmati rice varieties in July. In a surprising move last year, India also banned wheat exports after a heat wave disrupted wheat production.



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