India’s recent decision to extend the Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY), a free food grains scheme, for the next five years has garnered significant attention both domestically and internationally. This extension will involve an expenditure of approximately 11.8 trillion rupees (about $141.63 billion), marking it as one of the world’s largest food security initiatives. Designed to ensure food and nutrition security, the scheme targets about 813.5 million people, encompassing over 81.35 crore beneficiaries under the National Food Security Act.
The scheme, which was initially set to conclude in December 2023, will now provide free rice, wheat, and coarse grains/millets to eligible beneficiaries. This move reflects the Indian government’s commitment to addressing food and nutrition security, particularly for the poor and vulnerable sections of the population. The food subsidy for this five-year period is estimated to be around 11.80 lakh crore rupees. The scheme is anticipated to offer considerable monthly savings for ration card holders, as the government bears the cost of the foodgrains, which are provided free of charge.
The extension of PMGKAY has sparked a nationwide debate, with varying reactions from different political quarters. The opposition, particularly the Congress party, has criticized the decision as an indication of ongoing economic distress and growing inequalities. Congress leader Jairam Ramesh compared PMGKAY to the National Food Security Act (NFSA) passed in 2013, noting that Modi, then Chief Minister of Gujarat, had opposed the NFSA. The timing of the announcement, coinciding with upcoming state Assembly elections, has also raised questions about potential electoral motivations.
Economically, while the scheme has been welcomed by beneficiaries, some experts question its long-term sustainability. Concerns have been raised about the immediate impact on India’s fiscal deficit and the overall financial implications, given that the total food subsidy bill accounts for about 7.5% of the Union government’s revenue receipts. The scheme’s cost includes the procurement, storage, and distribution of rice and wheat. However, some argue that its immediate impact on the fiscal deficit may be minimal.
A significant concern is the accuracy of beneficiary data, which relies on ration cards issued by states based on the last Census conducted in 2011. With the next Census delayed due to the pandemic, there are worries that many potential beneficiaries might be missing out on the scheme’s benefits.
In conclusion, while the extension of the free food grains scheme is largely welcomed by the beneficiaries, it has also sparked political debate and raised concerns about the long-term sustainability of such welfare schemes. The financial implications of the scheme and the accuracy of beneficiary data remain subjects of heated discussion.