A wide surge in food basics prices in India is driving the government to take a range of measures to enhance supplies and reduce inflationary pressures.
While annual retail inflation reached a 15-month high of 7.44% in July, food price inflation reached 11.5%, the highest level in more than three and a half years, forcing Prime Minister Narendra Modi’s government to move fast to avoid public backlash in future state and national elections.
According to two government officials who declined to be identified because they are not licenced to speak to the media, the administration is contemplating expanding a free food programme that is set to expire in December to help low-income customers.
Food subsidies are expected to cost the government 1.97 trillion Indian rupees ($23.83 billion) in fiscal year 2023/24, with an extension of the free food plan potentially increasing the expense.