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India needs an extra 200 bln rupees to implement food security bill-minister

Source : REUTERS
Last Updated: Thu, Feb 14, 2013 08:27 hrs
A man carries sacks filled with cabbages at a wholesale vegetable market on the outskirts of Jammu

India needs a 200-billion-rupee ($3.72 billion) top-up for its proposed food security bill, aimed at ensuring subsidised grain for the poor, Food Minister K.V. Thomas said on Thursday, even as the government is seeking deep spending cuts.

The bill will be introduced in the budget session of parliament which begins on Feb. 21. The food subsidy bill for the current fiscal year was one trillion rupees, Thomas told reporters.

A massive increase in spending on food subsidies will make it tougher for Finance Minister P. Chidambaram to trim a swollen fiscal deficit that has put the country in danger of losing its investment-grade credit rating.

India's fiscal deficit is expected to reach 5.3 percent of gross domestic product by the end of March.

With very little resources at its disposal to cut the fiscal deficit - among the widest in major emerging economies - the government is resorting to deep spending cuts, which are further clouding near-term growth prospects.

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