Pandemic relief: Centre extends 5 kg ration scheme under PMGKAY till March

Just months before the crucial Assembly polls in Uttar Pradesh and Punjab, the Cabinet on Wednesday not only approved the Bill to repeal three contentious farm laws, but also extended the free foodgrain distribution scheme under the Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY) for four more months from December.

Under the PMGKAY, the Centre gives an additional five kilograms of rice or wheat per month to beneficiaries of the National Food Security Act (NFSA) over and above their usual monthly quota for free.

The Centre will incur an additional expenditure of around Rs 53,344.52 crore because of the extension. It plans to distribute an extra 16.3 million tonnes (MTs) of foodgrain over this period.

Thus far this financial year, the Centre has incurred an estimated additional subsidy of Rs 93,868 crore on the PMGKAY, which was restarted in May for two months after the second wave of Covid-19 and was later extended till November. A total of 8 MT and 20.4 MT of foodgrain were allocated for the two extensions, respectively. 

With the latest extension, the Centre will spend an extra Rs 1.47 trillion on food subsidy for the PMGKAY this fiscal. The Budget for financial year 2021-22 (FY22) estimated the food subsidy at Rs 2.43 trillion, which was 42.54 per cent lower than the revised estimate for FY21.

The cut was on account of extra provisioning done last year to clear all pending dues for loans taken from the National Small Savings Fund (NSSF) over the last few years to adjust for the extra subsidy required by the Food Corporation of India to procure and distribute food.

“In total, since the scheme was first started in March 2020, the total cost of PMGKAY after today’s extension will be around Rs 2.6 trillion,” Information and Broadcasting Minister Anurag Thakur told reporters.

• Under the PMGKAY, the Centre gives an additional 5 kg of rice or wheat per month to beneficiaries of the National Food Security Act 
• The Centre will incur an additional expenditure of Rs 53,344 crore due to this extension
• It has incurred an estimated additional subsidy of Rs 93,868 crore on the scheme in this financial year so far

Farm laws repeal

Meanwhile, the Cabinet also approved the Farm Laws Repeal Bill, 2021, to roll back the three laws passed by Parliament last September.

This comes after Prime Minister Narendra Modi’s announcement on Friday that the government would withdrawal of the three laws — The Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Act, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, and The Essential Commodities (Amendment) Act.

The Cabinet has completed the formalities to repeal the three farm laws, Thakur told reporters. “In the upcoming session of Parliament, it will be our priority to take back these three laws,” he said.

The winter session will begin on November 29 and conclude on December 23.

The repeal of the three farm legislations was a key demand of the Samyukta Kisan Morcha (SKM), a joint organisation of around 40 farmers’ unions protesting against these reforms for nearly a year now.

‘Mere formality’

Terming the Union Cabinet’s decision a mere formality, farmer leaders said now they want the government to resolve their other pending demands, most importantly the legal guarantee for minimum support price (MSP).

“Today’s Cabinet approval of a Bill repealing the three farm laws, of which the announcement has already been made by PM Modi, was just a formality. Now, what we want from the government is to take up our other demands,” Shiv Kumar ‘Kaka’ of the Rashtriya Kisan Mahasangh (RKM) told PTI.

Bharatiya Kisan Union leader Rakesh Tikait, in a tweet on Wednesday, clarified that the movement is far from over. “This protest will not end yet. We have a meeting on November 27 after which we will take further decisions. (Prime Minister Narendra) Modi ji has said farmers’ income would be doubled from January 1, so will ask him how it would be done. Farmers’ victory will be ensured when they get the right price for their crops,” Tikait said.