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Indian officials are proposing to extend a free grains program well into next year’s national election season, according to people familiar with the matter, a move likely to support Prime Minister Narendra Modi’s reelection bid for a third term.
The proposal involves continuing a $24 billion program by another six months to June 2024, said the people who asked not to be identified as the discussions are private. A final decision will be taken by Modi’s office in the coming months, they added.
The extra cost is expected to be nominal and can be met through this year’s budget allocation, the people said. The initiative was launched in December last year to provide free grains to about 800 million people until end-2023.
Extending the program until June next year coincides with the national vote that must be held by summer. Modi has polled above 60% in opinion surveys and is likely to lead his party to victory though there’s some voter discontent over rising unemployment and higher living costs.
A spokesperson from the Finance Ministry did not respond to a request for a comment.
The free grains program has in part helped Modi and his Bharatiya Janata Party to stay ahead of the opposition in the South Asian country, which accounts for nearly 30% of the world’s low-income population. The party and its allies won elections in seven out of the ten state polls since last year and there are five more due before the year ends.
Prolonging the program could help rein in inflation, which jumped to a 15-month high of 7.44% last month. Food inflation, which accounts for nearly half of the overall consumer price basket, rose to 11.51% in July. Uneven monsoon rains and drier weather conditions could affect crop production, prompting the government to ban some exports of rice varieties and restrict stockpiling of food commodities.
(Updates with additional details on inflation in seventh paragraph. A previous version of this story was corrected to make clear BJP and its allies have won seven out of the ten state polls since last year.)
