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Govt’s spend on free ration scheme at Rs 3.16 trillion

Likely to cross Rs 3.4 trillion by Sept 30

Govt’s spend on free ration scheme at Rs 3.16 trillion
The allocation under PMGKAY is likely to cross Rs 3.4 trillion by the end of September 30, sourced told FE.

The government expenditure on the free ration scheme — Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) since its April, 2020 roll-oiut has crossed Rs 3.16 trillion, the food ministry told Parliament on Friday.

Minister for state for consumer affairs Sadhvi Niranjan Jyoti said the Food Corporation of India had incurred around Rs 2.78 trillion so far while rest of the expenses of Rs 0.39 trillion has been incurred by  states which follow decentralized procurement system.

The allocation under PMGKAY is likely to cross Rs 3.4 trillion by the end of September 30, sourced told FE.

The food ministry in a recent note has said that if the scheme is extended to the second half of the current financial year with the current grain mix, the country’s rice stocks may fall below the buffer by April 1 next year. It also said it would cost more than Rs 90,000 crore to run the scheme in H2.              

Launched as part of the Covid-19 relief measures, 5 kg of grains are distributed free under PMGKAY to more than 800 million beneficiaries every month free of cost.

Additionally, these people also get an equal quantity of highly subsidised food grains under the National Food Security Act (NFSA).

The scheme, initially launched for the April-June period of FY21, was later extended till November-end, 2020; in the wake of the second wave of the pandemic, it was re-introduced in May 2021 and then got extended till FY22-end.

In March, the cabinet had announced extention of PMGKAY (phase VI) till September 30, 2022. The government is yet to take a call on extending the PMGKAY.

“Even though the Covid-19 pandemic has significantly abated and economic activities are gathering momentum, this PMGKAY extension would ensure that no poor household goes to bed without food during this time of recovery,” the food ministry had stated.

According to the food ministry, close to 76 million tonne (MT) of grain was distributed under PMGKAY till March, 2022 and by end of September 30, 2022, total allocation of grain would be 100 MT.

The economic cost of foodgrain procurement by the FCI, which includes expenses such as minimum support price payment to farmers, procurement, acquisition and distribution costs etc. for rice and wheat are estimated at Rs 3,670 and Rs 2,588 per quintal, respectively, for 2022-23.

The government distributes rice and wheat to beneficiaries under NFSA at Rs 3 and Rs 2 per kg, respectively.

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