The Indian government has introduced the subsidized sale of ‘Bharat Atta’, a branded wheat flour, at Rs 27.50 per kg across the country. This move comes amid rising inflation and aims to ensure affordable access to essential food items, especially in the lead up to the festive season.

Contents hide
1. Details of the Initiative
2. Government Measures to Control Prices
3. Impact on Farmers and Consumers
4. Outlook for Prices and Government Finances

Details of the Initiative

The ‘Bharat Atta’ initiative was inaugurated on Monday by Union Minister Piyush Goyal. Under this scheme, the wheat flour is being made available through cooperative bodies like NAFED (National Agricultural Cooperative Marketing Federation of India Ltd.) and NCCF (National Cooperative Consumers Federation of India).

Bharat Atta is being sold in packs of 10 kg and 30 kg at the outlets of cooperatives as well as retailers like Mother Dairy and Kendriya Bhandar. The government has set its price at Rs 27.50 per kg, nearly Rs 15-20 lower than market rates of Rs 40-45 per kg.

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Government Measures to Control Prices

This subsidized sale is part of the government’s efforts to control food inflation, which has been persistently high in recent months. Other steps include:

  • Increasing supply via Open Market Sale Scheme (OMSS) under which Food Corporation of India (FCI) sells wheat and rice stocks to bulk buyers
  • Extending the free food grains scheme for the poor by 5 years, incurring an additional Rs 2 lakh crore expenditure
  • Restricting exports of wheat, rice, broken rice, and wheat flour to ensure adequate domestic availability

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Impact on Farmers and Consumers

While the move will provide relief to consumers from soaring wheat prices, some farmer organizations have voiced concerns regarding its impact on crop procurement and minimum support price payments.

The government states that adequate procurement will be maintained to sustain the subsidized sales. However, export curbs have already impacted wheat exports, which were projected to cross 10 million tonnes this year.

Outlook for Prices and Government Finances

With global demand shrinking due to the economic slowdown, wheat and rice prices are expected to remain subdued in the coming months. The government is betting on this factor to continue subsidized sales without significantly impacting its finances.

However, much will depend on rainfall and production in the upcoming rabi season. The free foodgrains scheme extension entails additional annual expenditure of Rs 2 lakh crore. Along with subsidies on fertilizers, LPG and now wheat, rising welfare spending could pose a challenge for the government’s fiscal position.

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