Govt Reduces Wheat Allocation for 12 States under PMGKAY

Under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), the Centre has revised rice and wheat allocations for 12 states, asking Uttar Pradesh, Bihar, Tamil Nadu, and Kerala to switch to rice for their entire grain requirement. For others, the reduction in wheat quantity will be offset by the same amount of rice, ensuring that there is no shortage in overall grain allocation.

The latest move will help the government save 5.55 million tonnes (mt) of wheat under PMGKAY during the ongoing Rabi procurement season, which has seen the lowest wheat procurement in the last 15 years. Prior to this revision, the PMGKAY allocation plan would have resulted in an outgo of 10.93 mt at 100% offtake for the April-September period.

According to sources, the government now requires a maximum of 5.38 million tonnes of wheat following the revision. Concurrently, rice allocation under PMGKAY has increased to 18.53 mt from the previously revised 12.99 mt.

The Food Ministry stated in a letter to all state food secretaries on Tuesday that while there is no change in the other terms and conditions of the PMGKAY guidelines, the revision in the allocation has been undertaken "in order to mitigate the scarcity-like situation and to ensure availability of sufficient stocks as per stocking norms."

The Centre has been distributing free foodgrains to 81 crore beneficiaries under the National Food Security Act (NFSA) in excess of their legal entitlements of 5 kg per person per month under the scheme.

However, the continued outflow of wheat under PMGKAY has been called into question as grain procurement has been reduced this season. Wheat procurement was 16.2 mt as of May 1, 43.85 percent lower than the previous year. According to traders and experts, the procurement may be around 20 mt because farmers can sell above the MSP of Rs. 2,015 per quintal in the open market while official agencies buy at MSP.

It should be noted that wheat procurement was 11.13 million tonnes in 2007-08, and it has steadily increased since then, reaching a record 43 million tonnes in 2021-22.

"Because the government scheme is free, there is no concern about lifting, even if beneficiaries are given rice instead of wheat." Where the wheat allocation has been reduced but not completely withdrawn, it is up to the state governments to decide how to distribute the grains. While Tamil Nadu, Kerala, and Bihar may not have a problem because people consume rice, Uttar Pradesh may have some issues because wheat is preferred in the western region, according to a source.

In a letter to the Food Ministry on April 27, the Food Corporation of India (FCI) requested an 'immediate' revision in allocation due to the nearly 50% drop in arrivals, citing the fact that some States were still waiting to lift grains for May.

Furthermore, the move was required to maintain a sufficient level of buffer stocks in order to keep food inflation under control, according to FCI. As of April 1st, FCI had 18.9 mt of wheat and 55 mt of rice in stock (including 33.9 mt in the form of unmilled paddy).