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Published on : Feb 20, 2015

India will not make cuts to its multi-billion dollar welfare program in the food industry that allows citizens to purchase high quality rice and wheat at the cheapest rates, according to an Indian government source.

The Indian Prime Minister Narendra Modi had set up a panel in the previous months that appealed to the government for a cut in the welfare program. They asked for the government to reduce the total number of beneficiaries from the original 67 per cent to a lowered 40 per cent. The panel is trying to cut down the expenses of maintaining a US$18.64 billion subsidy on food; the subsidy has already weighed heavily on the depleting state finances.

Government officials responded that there was no way for this to happen. They maintained that the government is deeply committed to all its welfare programs, which includes the food security measures. There will be no such cut on the number of beneficiaries.

The government’s opinion against cutting down handouts could also stem from running the risk of public anger before major state elections, according to experts. This could especially be the reason behind not wanting to bring about the cuts in politically inclined yet monetarily lacking states such as Bihar.

The first election loss suffered by Narendra Modi’s party came in Delhi. His eight month winning streak came to a close after beginning with an overwhelming victory in the May 2014 general election.

A government official also said that there will be genuine anger among voters should the welfare’s number of beneficiaries be cut. The government cannot deviate from its duty to ensure food security to all Indian citizens.

India is the second largest rice producer in the world. Despite the investments, most of the welfare goods end up either stolen of wasted. This strains the resources of the government.