Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Will food security Act to add to fiscal woes?
Fri, 21 Oct Pre-Open

Almost two decades of reform and a full decade or more of a nonstop media festival of growth rates and India Shining songs and chants, an acute food crisis is on our hands. Food demand in India is expanding rapidly because of robust economic growth, higher disposable incomes and relatively low current per capita consumption. In the last five years, India's food security has slowly eroded as evidenced by the decline in per capita availability of a number of food commodities including cereals. Dependence on imports is rising. In India, more than 2 m children die of hunger every year.

In order to tackle the food security situation, the government of India (GOI) is planning to introduce the National Food Security Act. The Act seeks to cover about 67.5% of India's 1.2 bn people, expanding an existing food subsidy scheme that covers about 180 m of India's poorest people. The beneficiaries are divided into "general" and "priority" households with the latter recognized as the more vulnerable group but yardsticks for this have not been decided yet. The "priority" group will get rice at a fixed Rs 3 a kg, wheat at Rs 2 a kg and coarse grain at Rs 1 a kg. The general category, both in rural and urban areas, will get grains at half the price the government sets for payment to farmers.

But implementing the food security Act could come at a cost and add to the already high food subsidy bill. Once the Food Security Act is introduced, the subsidy burden on the exchequer would rise further. There is a proposal to provide jowar at Re 1 per kilo to poor families while its market price is Rs 30 per kilo. This means government will have to bear the burden of Rs 29/kg. This would worsen the fiscal deficit situation. The government is already struggling to meet the fiscal deficit target of 4.6% this year. It is estimated that the food security act may double India's annual food subsidies to about USD $23 bn or 2% of GDP.

With global crude oil prices staying over USD $100 a barrel, the government's hefty oil subsidy is set to swell. Though gasoline prices are now fully linked to the market, the government still heavily subsidizes diesel and cooking fuels. It remains to be seen how the government balances the demand for the food security act against the backdrop of a tight fiscal situation.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary


What else is happening in the markets today? Dig in...

Equitymaster requests your view! Post a comment on "Will food security Act to add to fiscal woes?". Click here!

1 Responses to "Will food security Act to add to fiscal woes?"

Dhruwwa

Mar 6, 2012

Yes to an extent it will help the rural/urban women & children to get better nutrition. But it will make the Men even more lazy.

Like 
  
Equitymaster requests your view! Post a comment on "Will food security Act to add to fiscal woes?". Click here!

Stock Market Updates

Sensex Trades Over 200 Points Lower, Dow Futures Down by 59 Points (Today's Market)

May 11, 2021 12:30 pm

BSE Sensex is trading up down 240 points, while the NSE Nifty is trading down by 52 points.

AUROBINDO PHARMA at All Time High; BSE HEALTHCARE Index Up 0.7% (Today's Market)

May 11, 2021 09:51 AM

AUROBINDO PHARMA share price has hit an all time high at Rs 1,064 (up 1.4%). The BSE HEALTHCARE Index is up by 0.7%. Among the top gainers in the BSE HEALTHCARE Index today are AUROBINDO PHARMA (up 1.4%) and PFIZER (up 1.4%). The top losers include PIRAMAL ENTERPRISES and CAPLIN POINT (down 0.2%).

Sensex Falls 400 Points on Weak Global Cues; Kotak Mahindra Bank & HDFC Top Losers (Today's Market)

May 11, 2021 09:30 am

Indian share markets open lower. The BSE Sensex opened down by 412 points, while the Nifty is trading lower by 124 points.

MARICO at All Time High; BSE FMCG Index Up 0.1% (Today's Market)

May 11, 2021 09:49 AM

MARICO share price has hit an all time high at Rs 487 (up 2.8%). The BSE FMCG Index is up by 0.1%. Among the top gainers in the BSE FMCG Index today are MARICO (up 2.8%) and P&G HYGIENE (up 0.7%). The top losers include DABUR (down 0.1%) and KRBL (down 0.1%).

GRINDWELL NORTON at All Time High; BSE CAPITAL GOODS Index Down 0.3% (Today's Market)

May 11, 2021 09:49 AM

GRINDWELL NORTON share price has hit an all time high at Rs 1,159 (up 3.4%). The BSE CAPITAL GOODS Index is down by 0.3%. Among the top gainers in the BSE CAPITAL GOODS Index today are GRINDWELL NORTON (up 3.4%) and HONEYWELL AUTOMATION (up 0.2%). The top losers include SOLAR INDUSTRIES (down 0.2%) and HAVELLS INDIA (down 0.6%).

SUZLON ENERGY Share Price Up by 5%; BSE OIL & GAS Index Up 1.3% (Today's Market)

May 11, 2021 09:42 AM

SUZLON ENERGY share price is trading up by 5% and its current market price is Rs 6. The BSE OIL & GAS is up by 1.3%. The top gainers in the BSE OIL & GAS Index is SUZLON ENERGY (up 5.4%). The top losers is ONGC .

View More Indian Share Market News

Most Popular

The Next Smallcap Winners(Profit Hunter)

Apr 30, 2021

Price is the only due diligence one might require to buy this business.

Time to Buy Smallcaps?(Fast Profits Daily)

Apr 30, 2021

In this video, I'll show you why I favour smallcaps over the Nifty.

Sell in May and Go Away?(Fast Profits Daily)

Apr 28, 2021

Does the concept of selling stocks in the month of May, work in the Indian market?

Are the Stock Markets Deaf to Covid Agony?(Profit Hunter)

May 6, 2021

Why are markets discounting the economic impact of Covid?

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


May 11, 2021 (Close)

MARKET STATS