Ministry of food seeks more than $ 28 billion for food subsidies: report
NEW DELHI: The Ministry of Food has sought more than Rs 2 lakh crore ($ 28.1 billion) to run the world's largest food welfare program in the fiscal year beginning April 1, three government sources said.
But the government is likely to allocate only around Rs 1.90 lakh crore, they added.
It is possible that the finance ministry cannot allocate more than Rs 1.90 lakh crore in the budget, an official said.
Details on the level of subsidy will be made public when the finance minister, Nirmala Sitharaman, presents the 2020-21 budget on Saturday.
An inappropriate allocation could force Food Corp of India, the main grain buying agency, to borrow up to $ 2 billion out of budget, the same official said.
A spokesman for the ministry of finance was not immediately available for comment.
In fiscal year 2018-19, the government assigned Rs 1.71 lakh crore for food subsidies, but finally assigned only Ra 1.02 lakh crore. As a result, Food Corp had to borrow from the market, bringing its general external loans to Rs 2.19 lakh crore ($ 30.81 billion) as of October 31, 2019, according to disclosures made in Parliament.
Despite an allocation of Rs 1.84 lakh crore for the current fiscal year to March, a shortage of resources could again force the government to reduce payment to Food Corp, said the three officials, who asked not to be identified due to the delicacy of the affair. .
India is likely to finance approximately $ 28 billion of its expenditure disbursement in the next Budget for 2020-21 through extrabudgetary loans, as it seeks to revive a fallen economy while keeping its fiscal deficit under control.
Under the National Food Security Law, Food Corp buys rice and wheat from farmers at a guaranteed price and sells basic food to 67% of the 1.3 billion people in India at approximately one tenth of the market price.
Since his coming to power in 2014, Prime Minister Narendra Modi has more than doubled food subsidies, which makes him the largest government mainline after the defense.