“We are confident that releasing 2 to 3 million tonnes of wheat in the open market will bring down prices,” said another source.
In line with official policy, the two sources with direct knowledge of the matter did not wish to be named.
He also said the government would decide later this month whether to extend the food program that provides free rice and wheat to the poor.
On top of the flagship food welfare scheme, Prime Minister Narendra Modi launched the free food program in April 2020 as part of the government’s COVID-19 relief measures.
In September, ahead of some crucial state elections, Modi’s administration extended the program for three months, adding $5.46 billion to government spending and making reining in the fiscal deficit challenging.
As well as cost, government officials have cited low government wheat stocks as a serious obstacle to continuing the free food scheme, which requires 95 to 100 million tonnes of rice and wheat per year.
A New Delhi-based trader associated with a global trade house said, “The government is in crisis due to low stocks and hence it will be difficult to continue the free food program without any cuts.”