India’s food subsidy regime needs to be overhauled with direct cash transfers to rein in losses in the public distribution of dietary staples to the poor, a key report said on Friday.
The Economic Survey, the basis for Finance Minister Arun Jaitley’s 2015/16 budget on Saturday, said reform of the food subsidies required more work.
India, the world’s biggest rice and wheat producer after China, runs a mammoth food welfare programme for the poor.
The cost of the South Asian nation’s food subsidies for the fiscal year ending March 31 are estimated to surge a quarter to 1.15 trillion rupees ($18.6 billion) from the previous year.
The programme covers over 65 million poor families through the distribution of subsidised food via a network of 450,000 ration shops. The state run network aims at ensuring minimum nutritional support to the poor and stability in grain prices.