India's Subsidy Burden Soars as Centre Lifts Wheat Flour Export Ban
India's government has spent over half of its fertiliser subsidy allocation for FY27 in just four and a half months, indicating a potential breach of the annual budget estimate. The country has utilised around 58% of the allocated amount, with Rs.990 Bn already spent by August 2026. This excessive expenditure could signal a budgeting problem rather than merely a spending issue.
The Centre's decision to lift the export ban on wheat flour and related products is seen as a confident sign about domestic supply. However, the move may come with some risks due to an uncertain monsoon season and the ongoing inflation concerns flagged by the Monetary Policy Committee (MPC). The government has also stepped up its focus on South America, particularly Chile, Argentina, and Brazil, as part of efforts to diversify trade and expand export opportunities.
India's Centre is set to sell onions at a subsidised price of Rs.35 per kg in Delhi from August 26th, amidst rising retail prices across several cities. This intervention will be undertaken through NAFED, NCCF, and Kendriya Bhandar, with supplies also being transported to Delhi and other cities.