Free foodgrain scheme till November has got cabinet approval: Sitharaman

Garib Kalyan Yojana is projected to cost the government an additional expenditure of around Rs 1.4 trillion.

The cabinet has approved a scheme to provide free foodgrain to 800 million poor till the end of November, said Finance Minister Nirmala Sitharaman on Twitter on Wednesday.

Prime Minister Narendra Modi, on June 30, had announced a scheme called Garib Kalyan Anna Yojana will be extended by five months to ensure that millions of poor in the country get food during the coronavirus pandemic.

He said the festival season is around the corner in India when “requirements as well as expenditure increase”, mentioning Bihar's Chhath Puja twice. Diwali is on November 14, and Chhath Puja, Bihar’s biggest festival, is on November 20. Bihar is scheduled hold elections before that.

Extending the date of giving 5 kg of free foodgrain to all ration card beneficiaries will require almost 20 million tonnes (mt) of extra grains. This will be over and above the usual PDS (public distribution system) requirement of 53-54 mt under the Food Act.

Under the first phase of Garib Kalyan Yojana, 12 mt of grains was allocated in April, May and June. Around 32 mt of extra grains has been allocated in total for distribution through the Public Distribution System (PDS) free of cost this year as part of relief for coronavirus.

The central government is projected to incur an additional expenditure of around Rs 1.4 trillion because of the free food grains distribution in two phases. This will be over and above the 2020-21 food subsidy projection of Rs 2.52 trillion, which also includes Rs 1.36 trillion of additional loans from the National Small Savings Fund. 

"810.9 million people would rightly get free food grains (5kg/person) for 8 continuous months," said Sitharaman on her personal Twitter handle.