Centre to spend extra Rs 93,868 crore for running PMGKAY-3 in FY22

Cabinet approves extra spending of Rs 67,266.44 crore for five months; earlier extra amount of Rs 26,602 crore was estimated for May and June, 2021

The Centre will bear an additional expenditure of Rs 67,266.44 crore on extending the free foodgrains distribution programme called the Pradhan Mantri Garb Kalyan Ann Yojana (PMGKAY) for five months starting from July, which together with the Rs 26,602 crore extra spending on the scheme for May and June, entails a total expected extra expenditure of Rs 93,868 crore on free food in FY22.

The union cabinet today gave a formal approval for extending the third phase of PMGKAY started for May and June for five more months ending in November.

This additional subsidy expenditure of around Rs 93,868 crore will be over and above the usual food subsidy requirement of about Rs 1.8 trillion that the Centre usually spends in a year to distribute cheap grains to over 800 million National Food Security Act (NFSA) beneficiaries.

The PMGKAY was reintroduced for two months till June this year in order to minimise the economic hardships being faced by the poor PDS (public distribution system) beneficiaries during the second wave of the Covid-19 pandemic.

Prime Minister Narendra Modi, while addressing the nation earlier this month, had announced that the Centre's free food programme PMGKAY will be extended for five months till Diwali.

The same proposal was approved in a Cabinet meeting chaired by Modi, on Wednesday.

Prior to that, in April 2021, the Centre had restarted the free food grains distribution scheme under PMGKAY for May and June with an estimated expenditure of Rs 26,602 crore.

The scheme was launched on the same lines of PMGKAY of 2020 started during the first COVID wave.

Under PMGKAY, the Centre gives 5-kilo food grains per person per month free of cost to 813.5 million beneficiaries covered under National Food Security Act (NFSA).

This is over and above distribution of highly monthly subsidised food grains of 5 kg per person given at Rs 1-3 per kg via ration shops to poor beneficiaries covered under the NFSA. T

The foodgrains outgo will be 20.4 million tonnes for five months distribution under the PMGKAY starting from July. This will be in addition to 8 million tonnes of food grains outgo under PMGKAY for May and June.

The government said the sanction of additional food grains under the PMGKAY for five more months starting from July would entail an estimated food subsidy of Rs 64,031 crore.

As the central government is bearing the entire expenditure towards this scheme without any contribution by states, an additional expenditure of about Rs 3,234.85 crore would be required to be met towards transportation and handling and ration shop dealers' margins, etc by the government, the statement said.

"Thus, the total estimated expenditure to be borne by the Government of India will be Rs 67,266.44 crore," it added.

The Food Ministry will decide on the allocation of wheat and rice. 
 

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