(Bloomberg) -- India will spend less on a food subsidy program that feeds 800 million people as the government has stopped providing some grains for free.
The country will spend 1.97 trillion rupees ($24 billion) in the year starting April 1, Finance Minister Nirmala Sitharaman said in her budget speech on Wednesday. While that's down from an estimated 2.87 trillion rupees this fiscal year, it's almost double the pre-pandemic levels of about 1 trillion rupees.
The reduction in food subsidy spending comes ahead of polls in several states this year and the general election in 2024. The free food program, which started in 2020 to help people reeling from the economic devastation caused by Covid-19, is believed to have helped the ruling Bharatiya Janata Party win elections in some major states.
That free food program expired at the end of December after multiple extensions. But the government has made a separate program — previously providing highly subsidized grains — now free for the beneficiaries.
The reduction in food subsidy spending is part of the government's plan to shrink its overall budget deficit — seen as key to winning higher credit score from ratings companies and keeping investor faith in the economy.
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