The Government has decided not to extend the Pradhan Mantri Garib Kalyan Anna Yojana, (PMGKY), a scheme that ran between April 2020 to December 2022 (except for a short period in between), and provided additional allocation of food grains, i.e., rice or wheat from the central pool at five kilograms a month free of cost to beneficiaries under the National Food Security Act (NFSA). PMGKY absorbed the shock of the pandemic for the extremely poor and also brought in political dividends for the ruling Bharatiya Janata Party in many States that had elections this year, including Uttar Pradesh in particular. While discontinuing the scheme, the Government has said that it will bear the expenses of food grains under the NFSA for 2023 and ensure free ration under the Act for the estimated 81.35 crore beneficiaries for that year. In other words, ration card holders can now avail 5 kg of wheat or rice per month for free rather than at a subsidised rate, while Antyodaya Anna Yojana cardholders will receive 35 kg of free foodgrains. As the estimated number of 81.35 crore beneficiaries is still based on Census 2011 numbers and Public Distribution System entitlements have been limited to ration card holders and quotas framed by the Union Government, some States have gone on to expand benefits to others through the NFSA and other schemes. By taking on the burden of the expenditure for this distribution, the Union government, which has estimated an additional amount of ₹2 lakh crore for the scheme, has provided limited but welcome relief in monetary terms for States.
While the expenditure numbers on food distribution and subsidy provisions seem fiscally expensive, the schemes have provided distress relief to the most needy, helped the Government control its food buffer stocks better, and also reduced wastage of procured food grains at a time when procurement figures for rice and wheat by the Food Corporation of India remain high. The PDS and the PMGKY have not only enabled basic food security but have also acted as income transfers for the poor by allowing them to buy other commodities that they could not have afforded if not for the benefits. There is, of course, the question of whether targeted distribution, including the identification of priority households and the “poorest of the poor”, has really helped the benefits reaching the deserving with concerns about diversion of foodgrains. But as rights activists have argued, the more robust solution could be a universalisation of the PDS, which has already worked well in a few States such as Tamil Nadu, as the scheme would be availed by anyone in need instead of a flawed targeting system.
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