India's food subsidies to cost 11% more than initial plan, sources say

By Sarita Chaganti Singh and Mayank Bhardwaj

NEW DELHI (Reuters) - India is likely to spend 2.25 trillion rupees ($11.97 billion) on food subsidies this financial year, four government sources said, up around 11% from the interim budget estimate in February due to higher spending on the support price for farmers.

The country's combined food and fertiliser bill is expected to reach 3.88 trillion rupees, up 5% rise from the estimate in the interim budget unveiled before the election.

Interim budget estimates will be replaced by a new budget from Prime Minister Narendra Modi's government that will be presented on July 23.

Food and fertiliser subsidies in the interim budget accounted for about 8% of India's total spending of 47.66 trillion rupees during the fiscal year that ends on March 31, 2025.

In the interim budget, the food subsidy bill was estimated at 2.05 trillion rupees, two of the sources said.

The increase since then is largely due to a rise in the price at which the government buys rice and wheat from domestic farmers, one of the sources said.

Meanwhile, the government is likely to stick to its previous estimate of 1.64 trillion rupees for the fertiliser subsidy, two of the sources said.

The ministry of Consumer Affairs, Food and Public Distribution, the Ministry of Finance and the Ministry of Chemicals and Fertilizers did not immediately reply to requests for comment.

($1 = 83.54 rupees)

(Reporting by Mayank Bhardwaj and Sarita Chaganti Singh in New Delhi; Editing by Mark Potter)