India's ruling Bharatiya Janata Party (BJP) is purportedly all set to sell Bharat rice at a subsidized price under its new inflation-tackling campaign ahead of next year's elections, media reports have suggested.
The average retail price of rice has skyrocketed to INR 43.3 ($0.52) per kg, marking a staggering fourteen percent surge compared to the previous year, Center for Monitoring the Indian Economy (CMIE) data has suggested.
Meanwhile, in November, India’s cereal inflation rate was 10.27%, a fifteen-month high.
What is Bharat Food?
To control food prices in the market, the federal government earlier introduced Bharat cereal and Bharat pulses, under which they sell food items at cheaper rates than the market price.
In November, the government introduced Bharat Atta (fortified wheat flour). The flour was made available across the country through 700 mobile vans and 2,000 government-operated outlets. Bharat is the Hindi word for India.
Why Controlling Food Inflation is Important?
Speaking about such government initiatives, Ajit Jha, assistant professor with the Institute for Studies In Industrial Development, said, “The sale of Bharat initiative is attracting consumer interest, and the government is actively taking to ensure that the price of food items remain within its check. Curtailing food price inflation is important as it affects the consumers directly.”
The professor argued that a large part of the country’s population still spends more than 50% of their earnings on food. "Hence, controlling food prices, especially wheat, rice and cereals, is essential for any government."
Jha also opined that as the 2024 national elections are nearing, ignoring food inflation around this year would be very unwise for any government.
“In the past, we have seen that National Democratic Alliance (which includes the BJP) lost elections due to high onion prices,” Jha shared.
Meanwhile, the Indian government is already providing free food grain to 800 million people under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY); it is also one of the largest schemes in the world by any government.
Will Bharat Scheme Help Curb Inflation?
Experts remained tight-lipped over the matter, as many opined that despite the launch of subsidized cereals, pulses and wheat flour have not come down.
Consumer Affairs Secretary Rohit Singh told the Indian news website Money Control that although the price is not down yet, it has started plateauing, and the government is strictly observing the trend, adding that the government aims to bring the price of pulses under control by February.
However, Jha stressed that in schemes like Bharat or PMKGAY, the government is trying to directly connect with poor people and “directly entering into the market to sell rice through Open Market Sale Scheme (OMSS) to provide the maximum benefits to consumers.”
Devendra Pant, chief economist at India Ratings, shared his doubt over selling subsidized food, adding that economic growth figures may not accurately represent the situation at the bottom of the income pyramid.
Speaking on numbers, Pant said that he expects a decline in the Consumer Price Index (CPI) to 4% by the end of 2024-25, however, he expects inflation to average around 5.2-5.3% for 2023-24.