Centre extends free foodgrain scheme for 800 million till this Diwali

The Central government on Monday extended the ongoing free additional foodgrains distribution scheme under the Pradhan Mantri Garib Kalyan Anna Yojana for five more months starting from July till November as millions of poor families remain badly impacted due to the second wave of Covid-19.

The PMGKAY-3 was initially announced for the months of May and June in view of the second wave of COVID-19.

Under the Garib Kalyan scheme, Centre distributes 5 kg of wheat or rice per person per month free of cost to almost 800 million beneficiaries of the National Food Security Act (NFSA), over and above their usual monthly entitlement.

After today, extension, the additional subsidy requirement under PMGKAY-3 at the current rate should swell to over Rs 90,000 crore including Rs 26,000 crore for the first two months.

This should be over and above the usual PDS subsidy requirement of Rs 1.8 trillion in FY22.

The scheme which was first introduced during the first wave of Covid in April 2020, was restarted again in May 2021 in light of the second Covid wave.

However, a crucial differentiator between the two schemes was that unlike the first, this time around pulses didn’t form part of the free distribution scheme as the Centre didn’t have enough stocks in its warehouses.

According to rough estimates around 20 million tonnes of extra grains will be needed to meet the additional requirement of five months starting from July.

This, should not be problem as food grains stocks in Central pool as on May 1, 2021 was in excess of 100 million tonnes (this included 17.6 million tonnes of unmilled rice)

In May and June under PMGKAY-3, around 8 million tonnes of extra foodgrains are to be distributed to nearly 800 million NFSA beneficiaries each month.

Meanwhile, data showed that till June 3, under the PMGKAY-3, states have lifted more than 6.4 million tonnes of foodgrains from Food Corporation of India's depot (which is around 80 per cent of the total PMGKAY allocation for May and June 2021).

Of this around 2.8 million tonnes had been distributed by 34 states and UTs to around 550 million NFSA beneficiaries for May 2021 and around 130,000 tonnes of foodgrains have been distributed to around 26 million NFSA beneficiaries for June 2021 (see chart).

This is in addition to the usual distribution under the NFSA, which reached almost 90 per cent of intended beneficiaries in May 2021 and 12 percent of them in June till June 3, 2021. The food subsidy incurred for PMGKAY-3 till June 3, for May and June was Rs 9,200 crore.

Last year, in Fy-21, amid the nationwide lockdown, the Centre launched the PMGKAY-1 in April 2020, initially for three months starting from April, which was later extended to five months as the situation continued to remain fragile.

Under this the Centre distributed 5 kilograms of wheat or rice per person per month to almost 80 crore beneficiaries over and above the normal entitlement under the Food Security Act for free.

In addition, all the eligible families were also distributed 1 kilogram of pulses per month without any charge.

Through two tranches of the PM Garib Kalyan Yojana and one of Atmanirbhar Bharat, the central government distributed around 32 million tonnes (mt) of additional grain in FY21 over and above the usual sale through the public distribution system (PDS) and other welfare schemes of around 55 mt of wheat and rice.

According to the government, the total subsidy for free distribution of grains came to around Rs 46,061 crore for the first three months of April, May and June.

After that the Garib Kalyan Anna Yojana was extended for five more months, it bore an additional subsidy of around Rs 76,000 crore.

Therefore, the total subsidy implication for both the packages of Garib Kalyan came to around Rs 1.49 trillion (though actual estimates showed it could be lesser at around Rs 1.05 trillion), which also included subsidy incurred for distribution of pulses and on free distribution of grains to migrants for Atmanirbhar Bharat.

Though the Centre claims that its free foodgrains distribution scheme has greatly helped those who were in dire need during the pandemic, but, civil society activists say that the benefit was only limited to those who possessed a NFSA ration card.

Status of Food Grains Lifting and Distribution under PMGKAY-3 (Till June 3, 2021)

Monthly Allocation (million tonnes per month)	Lifting By States (In million tonnes)	Month of Distribution	Distributed Quantity (In million tonnes)	Beneficiaries Covered (in million)	Subsidy Delivered
3.96	6.30	May 2021	2.75	550	Rs 8755 cr
-	-	June 2021	0.13	26.4	Rs 473 cr
-	-	Total	2.82	-	Rs 9229 cr

NOTE: Distribution for May and June months is ongoing. Timeline for lifting food grains by States from FCI has been extended by 15 days (i.e. 15th June). Till June 3, 2021, almost 34 States and UTs have started free foodgrain distribution under PMGKAY – III

Source: Ministry of Food and Consumer Affairs