The Centre’s free ration scheme—Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY)—will be extended for the next five years, Prime Minister Narendra Modi said on Saturday. “The government will extend the scheme of providing free ration to 800 million poor people in the country for the next five years,” Modi said at an election rally in Durg, Chhattisgarh.
Since January this year, the Centre has been providing free foodgrain (5 kg per beneficiary) to states for the scheme, initially valid till December 31 this year. Under PMGKAY, earlier known as National Food Security Act (NFSA), the government’s annual expenditure on account of the food subsidy is estimated at Rs 2 trillion. For FY24, Rs 1.97 trillion has been budgeted under this expense.
Officials said subsidy expenses on account of PMGKAY are likely to increase next fiscal onward with corresponding increase in economic cost of grain management by the Food Corporation of India (FCI). As per Budget estimates, the FCI’s economic cost, which includes minimum support price (MSP) to farmers, storage, transportation and other costs, for rice and wheat for 2023-24 is Rs 39.18/kg and Rs 27.03/kg, respectively.
The FCI in collaboration with state agencies procures and distributes more than 55 million tonne (MT) of wheat and rice annually under PMGKAY through 530,000 fair price shops across the country.
In April 2020, the government had launched PMGKAY in midst of the first Covid-19 wave to provide additional 5 kg of free foodgrain to each beneficiary under the NFSA in addition to 5 kg of grain at a highly subsidised rate of Rs 3/kg and Rs 2/kg for rice and wheat, respectively.
The government has incurred an expenditure of over Rs 3.9 trillion under PMGKAY since its launch, with distribution of 111 MT of foodgrain so far.
In April 2022, the International Monetary Fund had lauded India’s efforts for food distribution during the pandemic. The fund had stated that the country averted a rise in extreme poverty during the period by ensuring food security through PMGKAY. Currently, the scheme is being implemented across all 36 states and Union Territories, benefiting around 813 million individuals.