DHAKA: The benchmark BSE Sensex on Tuesday plunged 590 points to end below the 18,000 mark as the rupee fell past the 66-mark to a lifetime low and concerns were raised about the subsidy burden after passage of the food security bill.

The currency closed at the 66.24 a dollar level, reports Hindustan Times.

The BSE benchmark Sensex also snapped its three-day rising streak and nosedived over 590.05 points to end below the 18,000-level at 17,968.08 on increased capital outflow due to the rupee’s record lows against the dollar amid concerns the food bill would raise subsidy burden.

On similar lines, the broad-based National Stock Exchange index Nifty fell below a crucial 5300 level by dropping 189.05 points.

Analysts say the Bill, which seeks to provide foodgrains at highly subsidised rates to an estimated 810 million people across India, will only widen deficit and fuel inflation due to increased government spending.

However, India finance minister P Chidambaram insisted on Tuesday that the government can afford a vast new food programme for the poor despite concerns about its impact on the strained public finances.

The Food Security Bill is a key part of the ruling UPA government’s strategy to win a third term.

BDST: 2047 HRS, AUG 27, 2013
RoR/RIS