Food Bill could inflate budget deficit.

New Delhi: If India is able to pass a new law that would give millions cheap food, the costs of the move would inflate the nation's budget deficit significantly.

The National Food Security Bill, an election promise of the ruling Congress party, aims to feed 70 per cent of the population and is expected to cost about USD 23 billion a year. The cost could widen India's already swollen budget deficit, putting into jeopardy its coveted investment-grade status.

The bill, which would raise India's annual food subsidy spending by 45 percent, promises wheat and rice at a fraction of the cost to about 810 million people.

The government has already budgeted Rs 900 billion (USD 16.6 billion) for the scheme in the current fiscal year ending March 2014. If the bill is passed, the Government  would need to come up with as much as Rs 1.3 trillion in 2014-15.


Source : english.manoramaonline.com