Cabinet approves extension of free ration scheme for poor by three months

Free ration to 800 million for three more months till December 2022 to cost Rs 44,700 crore, says I&B Minister

Ahead of assembly elections in Gujarat and Himachal Pradesh, the government on Wednesday extended by three months its programme to provide free rations to the poor at a cost of Rs 44,762 crore as it looked to ease pain from high inflation.

The scheme to provide 5 kg of wheat and rice free of cost to 80 crore poor every month, which was ending on Friday, will now run through December 31, 2022, I&B Minister Anurag Thakur said.

The Union Cabinet headed by Prime Minister Narendra Modi in a meeting on Wednesday decided to extend the scheme by three months, he said.

The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) was started in April 2020 to help the poor whose livelihoods were shuttered by a nationwide lockdown aimed at containing the spread of the Coronavirus. The scheme has been extended multiple times and was to end on Friday.

"At a time when the world is battling with the effects of Covid on its decline and insecurity due to various reasons, India has been successfully maintaining food security for its vulnerable sections while taking necessary steps to keep availability and affordability for common man," an official statement said.

"Recognising that people have gone through a difficult period of pandemic, government has decided to extend PMGKAY for a period of three months so that poor and vulnerable sections of society are supported for the forthcoming major festivals." Under this scheme, 5 kg of foodgrain per person per month is provided free of cost for all the beneficiaries covered under the National Food Security Act (NFSA).

Thakur said the government has so far spent Rs 3.45 lakh crore on the PMGKAY scheme since its launch in April 2020.

With the additional expenditure of about Rs 44,762 crore for the latest extension, the overall expenditure of the PMGKAY will be about Rs 3.91 lakh crore for all the phases, he said.

Thakur said 122 lakh tonne (12.2 million tonne) of foodgrains will be given out free of cost in the three months from October 1.

The total allocation of foodgrain for phases I-VII will reach about 1,121 lakh tonne (112.1 million tonne).

The sixth extension pro-poor scheme comes ahead of assembly elections in Gujarat and Himachal Pradesh and also at a time when food inflation is ruling at a high level.

Consumer price index (CPI) based inflation in the food basket rose to 7.62 per cent in August 2022 against 6.69 per cent in the preceding month, as per the National Statistical Office (NSO) data.

The retail inflation in the food segment was 3.11 per cent in August last year.

To reduce their hardship during the COVID-induced lockdown, the Centre had launched the PMGKAY for providing free 5 kg foodgrains per person per month to about 80 crore people covered under the National Food Security Act (NFSA).

The free quota is over and above the normal allocation under the NFSA, which is 5 kg per person per month at a highly subsidised rate of Rs 2-3 per kg.

The scheme has been extended amid concerns in some quarters about the government's buffer stocks of foodgrains, as erratic monsoon rains have led to fear of lower production of rice.

Rice production is estimated to fall by 6 per cent to 104.99 million tonnes in the Kharif season this year.

Wheat output had also dropped to 106.84 million tonnes in the 2021-22 crop year ended June from the record 109.59 million tonnes in the previous year due to heat waves early this year. The procurement of wheat fell by more than 50 per cent to 19 million tonnes in the 2022-23 marketing year (April-March), forcing the Centre to ban wheat exports.

Earlier this month, the exports of broken rice were also banned and a 20 per cent export duty was slapped on non-basmati rice and non-par boiled rice.

Initially, the PMGKAY programme was announced only for a period of three months -- April, May and June 2020 (Phase-I).

Later, the government extended the scheme from July to November 2020 (Phase II). In the first two phases, the Centre also provided pulses, but later discontinued them.

When the second wave of the pandemic broke out, the Centre in April 2021 re-introduced the scheme for a period of two months of May and June 2021 (Phase-III) and then extended it for another five months from July to November 2021 (Phase-IV).

The scheme was again extended from December 2021 to March 2022 (Phase-V).

On March 26 this year, the Centre again extended the scheme to provide 5 kg of foodgrains free of cost to the poor for six months till September 30 (phase VI) at an estimated cost of over Rs 80,000 crore.