India to spend over $141 billion to extend free food grains program

NEW DELHI (Reuters) -India will spend 11.8 trillion rupees ($141.63 billion) to extend its free food grains program for the next five years, a federal minister said on Wednesday, but the government remains confident of meeting its fiscal deficit target.

The scheme is aimed at ensuring food and nutrition security for 813.5 million people, Information Minister Anurag Thakur told the media after a federal cabinet meeting.

Indian Prime Minister Narendra Modi on Nov. 4 announced his government would extend the welfare scheme, which was due to end in December, by five years.

The announcement, which came ahead of general elections due early next year, was approved by the cabinet on Wednesday.

“Free food grains will strengthen food security and mitigate any financial hardship of the poor and vulnerable sections of the population,” the government said in a statement.

Economic Affairs Secretary Ajay Seth, at a separate event, said the government is confident of meeting its fiscal deficit target for the current financial year despite higher spending on the free food grain scheme.

The government aims to cut fiscal deficit to 5.9% of gross domestic product (GDP) for the year ending March 31.

Seth added that India is committed to lowering the fiscal deficit to 4.5% of GDP by 2025/26.

($1 = 83.3185 Indian rupees)

(Reporting by Sarita Chaganti Singh; Editing by Sonia Cheema and Varun H K)