India free food program for poor to cost $10 billion if extended

NEW DELHI — India is likely to extend its free food program for the poor by three to six months, CNBC TV18 reported, a move that could cost the government $10 billion more and make it challenging for it to meet its fiscal deficit target.

India has spent nearly $43 billion since April 2020 on its free food program known as ‘Pradhan Mantri Garib Kalyan Anna Yojana’ where it provides 5 kg of foodgrain to poor families.

A six-month increase could cost the government an additional 800 billion rupees ($10 billion), according to a government official, who did not want to be named.

A spokesperson for India’s finance ministry did not immediately reply to a message seeking comment.

Most economists expect the Indian government to miss its fiscal deficit target of 6.4% of GDP for the 2022/23 year that started on April 1 as it has taken a number of measures to fight inflation that could cost the government over $20 billion. — Reuters