The National Food Security Act (NFSA) covers 81 crore people, and the Union Cabinet on Friday decided to give all of them free food grains for a year.
Families who previously paid Rs 1 for coarse grains, Rs 2 for wheat, and Rs 3 for rice per kg will now receive 35 kg of food grains free for the next year, while others will receive Rs 5 kg free each month until December 2023. The additional funding for the scheme has been projected at 2 lakh crores by the Center.
After the Cabinet meeting, Union Food Minister Piyush Goyal gave a brief explanation of the decision and stated that it was just another example of Prime Minister Narendra Modi's pro-poor approach. He said that the Garib Kalyan Ann Yojna of the Prime Minister has guaranteed 5 kg of free foodgrains for the poor for 28 months.
According to experts, the increased food subsidy spending as a result of Friday's decision would be around Rs 25,000 crore, taking into account the economic cost of grains. In contrast, the exchequer would have spent between Rs. 1.6 and 1.7 trillion if PMGKAY had been extended for an additional year.
Since the free ration scheme's commencement in April 2020, when the first Covid-19 wave was ongoing, it has cost the exchequer around Rs 3.91 trillion. With the exception of the time from December 2020 to April 2021, the scheme has been running continuously since its beginning and has received many extensions. A three-month extension was most recently given till December 31, 2022.
800 million individuals have been receiving 5 kg of food grains free each month as a result of the PMGKAY. Over and beyond the standard quota allowed by the NFSA, free grains have certainly been delivered at highly subsidized rates. Under the free ration scheme, the Center has so far distributed 111.8 million tonnes of foodgrains to states and union territories.
The fiscal cost of PMGKAY is estimated based on the economic costs of the grains, however, after accounting for the open market sale price of the grains, the actual cash cost will be much lower. Concerns over a potential decrease in India's grain supplies, notably of wheat, are also addressed by the Cabinet decision.
