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COMBINING FISCAL prudence and the imperative of safety net, the Union government Friday said it would provide free foodgrains to beneficiaries under the National Food Security Act, 2013, as per their entitlement, for a year beginning January 2023. It has, however, discontinued the Pradhan Mantri Garib Kalyan Anna Yojana launched in April 2020 amid Covid-19 under which 5 kg of free foodgrains was provided to every person on top of the NFSA entitlement of 5 kg foodgrains at subsidised rates.
“The Central government provides foodgrains to people — rice at Rs 3 per kg, wheat Rs 2 per kg, and coarse grains Rs 1 per kg — under the NFSA. Now, the Prime Minister has taken a historic decision to provide food security to the poor free of cost across the country,” Union Food Minister Piyush Goyal said briefing reporters on the Cabinet decisions.
The NFSA covers about 81.35 crore people and Goyal said the Centre would bear the entire cost of Rs 2 lakh crore to provide them food security. Asked if the government has decided to discontinue the Pradhan Mantri Garib Kalyan Anna Yojana, he said, “It has been merged (with the NFSA). The free portion of that scheme has been added to the NFSA. Now, the entire quantity of 5 kg and 35 kg under the NFSA would be available free of cost. There is no need for additional foodgrains.”
The NFSA covers 50 per cent of the urban population and 75 per cent of the rural population. There are two categories of beneficiary households under the NFSA – Antyoday Anna Yojana (AAY) and the Priority Households. While the AAY households are entitled to 35 kg of foodgrains per month irrespective of the number of family members, the priority households get foodgrains depending on the number of family members (each member 5 kg per month).
An official told The Indian Express that the NFSA would have to be amended and a notification was expected soon.
For the first time, India will have a Central food security legislation which gives the poor a ‘right’ to receive 5 kg foodgrains free of cost. Earlier, the poor — about 81.34 crore people comprising 75 per cent living in rural areas and 50 per cent in urban areas — paid a small price of Rs 3 per kg for rice and Rs 2 per kg for wheat. The decision softens the blow the poor may suffer with the PM Garib Kalyan Anna Yojana being discontinued by the end of the month. Under PMGKAY, the government provided 5 kg foodgrains free on top of the NFSA entitlement of 5 kg subsidised foodgrains.
As per the latest allocation order for December, 13.67 lakh metric tonnes of wheat and 31.72 lakh metric tonnes of rice are required under the NFSA. The monthly requirement of the PMGKAY stood at about 40 lakh metric tonnes (wheat: 7 lakh metric tonnes and rice: 33 lakh metric tonnes)
The government used to receive Rs 13,900 crore in a year from selling subsidised foodgrains under the NFSA. With this additional outgo, the total food security bill will rise to about Rs 2 lakh crore. Discontinuing the PMGKAY would, however, save the government Rs 15,000 crore a month or about Rs 1.8 lakh crore a year.
The discontinuation of PMGKAY comes at a time when the foodgrains stock has depleted over the months. As on December 1, 2022, the wheat and rice (including unmilled paddy) stocks in the Central pool stood at 190.27 lakh metric tonnes and 364 lakh metric tonnes. While the rice stock position is comfortable, the wheat stock is just above the buffer stock requirement norms.
As per the official data, the government had spent about Rs 3.45 lakh crore up to September, and the last extension of the scheme – just ahead of the Gujarat and Himachal Pradesh Assembly elections – for three months till December 2022, is estimated to raise the total outgo to Rs 3.91 lakh crore. The total foodgrain allocation under the scheme stood at 1,121 lakh metric tonnes.
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