India extends free food programme ahead of state elections

India has extended a free food programme for the poor by three months, a move that will add $5.46 billion to the government’s costs and make for a bigger challenge to efforts to rein in the fiscal deficit, ahead of key state elections.

The extension of the world’s biggest free food programme comes ahead of elections in Prime Minister Narendra Modi’s home state of Gujarat and Himachal Pradesh due by the year-end, where he faces challenges from emerging regional parties - promising power and other subsidies.

“The free food programme has helped India avert hunger during coronavirus lockdowns, but many poor people still need this safety net, and that’s why the government has extended the scheme,” said Devinder Sharma, an independent farm and food policy expert.

“But it also been extended due to impending state elections,” he said.

With the latest extension, India could spend nearly $47 billion in total for the food programme that started in April 2020 as Covid-19 relief measure.