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India earmarks $1.9 bn for populist food bill

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(Globalpost/GlobalPost)

India's government on Thursday earmarked $1.9 billion for a populist programme to combat malnutrition, a move seen as a major vote winner for the ruling Congress party in elections next year.

The National Food Security Bill, expected to be cleared by lawmakers in the ongoing session of parliament, will subsidise the sale of huge quantities of grains to nearly 70 percent of the country's population.

"Government is committed to the food security bill," Finance Minister P.Chidambaram said while presenting the annual budget in parliament.

He said 100 billion rupees ($1.9 billion) had been set aside as incremental cost to implement the bill, which was one of the centrepieces of the ruling Congress party's election campaign in 2009 and has already been approved by a parliamentary committee.

It guarantees a monthly supply of between three kilos (seven pounds) and seven kilos of grain per household, depending on their economic situation.

According to Food Minister K.V. Thomas, about three million tonnes of foodgrain will be required for the implementation of the bill.

But critics say India can ill afford such a costly programme at a time of slowing economic growth and a yawning budget deficit.

And the country's agriculture ministry has warned that the programme requires a major boost to farm output and could potentially curtail exports.

Existing food subsidy programmes in India have been marked by rampant corruption, with little of the grain reaching its targetted recipients.

However, analysts said the populist spending on subsidies for food, fuel, fertiliser and cooking gas will push up prices further.

India's Prime Minister Manmohan Singh called malnutrition "a national shame" last year after a government report found that 42 percent of children under five were underweight.

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http://www.globalpost.com/dispatch/news/afp/130228/india-earmarks-19-bn-populist-food-bill