Centre extends free ration scheme keeping in mind upcoming polls, festive season : The Tribune India

Centre extends free ration scheme keeping in mind upcoming polls, festive season

The scheme to cost additional Rs 44,762 crore



Tribune News Service

Vibha Sharma

New Delhi, September 28

The BJP-led Centre today extended by three months the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY)—the programme to provide free rations to India’s 80 crore poor.  The move, in mind high inflation in the country and upcoming festival season, comes ahead of the critical Gujarat and Himachal Pradesh elections. 

Photo used for representational purpose only. iStock

Briefing on the Cabinet meeting headed by Prime Minister Narendra Modi, Union Minister Anurag Thakur said the scheme to provide 5 kg of wheat and rice free of cost to 80 crore poor every month, which was ending on Friday, will now run through December 31. “Recognising that people have gone through a difficult period of pandemic, the government decided to extend PMGKAY for a period of three months so that poor and vulnerable sections of society are supported during forthcoming festivals,” he said, adding that 122 LMT (lakh tonnes) food grains will be provided to more than 80 crore people at a cost of over Rs 44,762 crore.

The scheme was started in April 2020 to help people whose livelihoods were affected by a nationwide lockdown.

Most states, including those ruled by the BJP, wanted the scheme to continue, officials said.

The decision to carry on comes amid low wheat stocks and projected decline in rice production due to fall in acreage because of first deficit and then excess rains. Thakur assured there is sufficient “grain in buffer stock and that there will be no shortcoming/deficiency in fulfilling commitment and providing rations whether wheat or rice.”  

According to the first advance estimates for the 2022-23 crop year (July-June), foodgrain production is estimated at 149.92 million tonnes as against 156.04 million tonnes in the previous season.

As per the FCI website, the current rice stock in the country is 244.63 LMT (lakh tonnes) and wheat 248.22 LMT.

While paddy procurement will begin next month, the total quantity of unmilled paddy lying with the FCI and state agencies is 161.60 LMT, which is enough to fulfil all demands, say officials.

However, the government has to make do with the existing wheat stock for the next six months when the new crop arrives. At the current consumption rate, around 20 to 21 LMT wheat is required every month. As per the stocking norms, 44.60 LMT as operational stock and 30 LMT as strategic reserves should be available on April 1 when the next crop starts arriving.

The heat wave in Punjab and Haryana affected the wheat crop, resulting in shrivelled grains. The next crop is expected to arrive in the mandis beginning April 1, 2023. Till then, the country has to rely on its existing stocks, which is the reason the government increased the quota of rice in free ration, which was objected to by states where wheat is consumed.

Notably, the Expenditure Department under the Finance Ministry is also believed to have advised against extending the scheme on food security and fiscal grounds. 

The government has already placed restrictions on the export of wheat and flour, triggering a jump in the demand for wheat flour overseas. The kharif production (largely rice) is expected to fall by 10-12 million tonnes this season due to poor rains, crop diversification and later excess rains. 

The government has so far spent Rs 3.45 lakh crore on the PMGKAY scheme since its launch in April 2020.  With the additional expenditure of about Rs 44,762 crore for the latest extension, the overall expenditure of the PMGKAY will be about Rs 3.91 lakh crore for all the phases. The aggregate allocation of food grain will be about 1121 LMT.

PMGKAY in operation for 25 months

Phase I and II (8 months): April 2020 to Nov 2020

Phase-III to V (11 months): May 2021 to March 2022

Phase-VI ( 6 months): April 2022 to Sept 2022

#inflation

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