NEW DELHI: India's Finance Minister, P. Chidambaram, insisted Tuesday that the government could afford a vast new food programme for the poor designed to eliminate malnutrition.

A flagship program of ruling Congress party, the Food Security Bill is worth an annual cost of about $19 billion. It was passed by the lower house late Monday night, after a nine hour debate in the National Parliament.

Once passed by the upper house and approved by the president, it will reform India's current food distribution system, providing five kilograms of heavily subsidised food grain per month to more than 800 million people.

The Indian rupee in morning trade fell to a record low of 65.71 against the dollar, leading stock markets to fall by 2.56 per cent after the Lower House passed the Food Security Bill.

“We will remain within the limit I have set for myself in the budget,” Finance Minister P. Chidambaram told reporters at a press conference in the capital, referring to concerns regarding increased pressure on India’s finances after the bill is implemented.

The government has budgeted an additional 230 billion rupees annually for the programme. According to a government statement, this act takes the total food subsidy bill in 2013-14 to 1.25 trillion rupees.

The Reserve Bank of India had earlier cautioned against increased public spending stemming from the food bill. It further warned that this could deepen India’s financial deficit and strengthen the already elevated inflation in the economy.

Congress party chief, Sonia Gandhi stated in a rare speech in parliament on Monday that the food bill was a chance for India to send a “big message” to the world.

“… India is taking the responsibility of providing food security of all its citizens”, she said.

Critics are skeptical of the outcome, however.

They say that the country cannot afford to implement such a costly new welfare scheme, seeing it rather as a ploy to win votes ahead of elections next year.

They also argue that the additional resources required, 5 million tones of food grain a year, will most likely be funneled into the corrupt Public Distribution System.

India's economic growth has slumped to five per cent on an annual basis, its slowest rate in a decade. Despite decades of economic growth, the country still struggles to feed its 1.2 billion population adequately.

Kris Gopalakrishnan, president of the Confederation of Indian Industry, said that the public spending burden was worrying but “the larger concern is regarding the effective implementation of such a high profile and critical social agenda”.

About 240 million families already have ration cards entitling them to 35 kilograms of subsidised grains, which they buy at low prices at the 500,000 government-run Fair Price Shops across the country.

The Food Security Bill will cover 75 per cent of rural citizens and 50 per cent of urban residents across India. State governments would be required to identify those eligible.

The bill also includes provisions for extra food for pregnant women, children and lactating mothers, who are entitled to a maternity benefit of at least 6,000 rupees.

The pressure on the rupee and stock markets in India came amid a decline in Asia due to concerns about possible US military intervention in Syria's escalating civil war.

The rupee, one of Asia's worst-performing currencies this year, has fallen on fears of foreign fund outflows as the US economy picks up.

Chidambaram said on Monday that he expected the food bill to clear the upper house of parliament “in the next couple of days”.

It will then need to be signed by the president to pass into law.