WITH SEVERAL states cutting across party lines — from BJP-ruled Gujarat to Congress-led Rajasthan — set to seek an extension of the free foodgrains scheme (Pradhan Mantri Garib Kalyan Anna Yojana) beyond September 30, the Centre may be inclined to continue with it for at least a few more months.
To alleviate Covid distress, the PMGK Anna Yojana was initially announced for a three-month period (April-June 2020) and was extended several times, with its sixth phase ending September. Given the quantum of wheat and rice available in the buffer stock now, free foodgrains can be provided to the poor for another three months till December 2022, sources said.
The Sunday Express had on September 4 reported that the decision to extend it would be a “political call” given the costs involved. The bill for the first six months (April-September 2022) is estimated to be about Rs 80,000 crore, and the Department of Expenditure under the Union Ministry of Finance had, in an internal note, advised against extending it both on “grounds of food security and on fiscal grounds”.
When contacted, Gujarat Food & Civil Supply Minister Naresh Patel said the state is likely to request the Central government to further extend it, at least till Diwali. “The Diwali festival will be there in October. So, we are likely to write to the Central government to extend it till Diwali, so that it provides respite to the poor families,” Patel told The Indian Express.
According to Patel, the state government is providing free food grains to around 71 lakh families holding cards under the National Food Security Act (NFSA) covering a population of around 3.5 crore.
Rajasthan Minister for Food and Civil Supplies Pratap Singh Khachariyawas said the Centre must continue the PMGK Anna Yojana beyond September. “I will write to the Centre about it. Apart from this, the Centre should also increase the limit for the number of NFSA beneficiaries for states, as more people want to be included but due tothe upper cap set by the Centre, we are not able to include them,” he told The Indian Express.
Some states such as Uttar Pradesh and Bihar said it was for the Centre to take a final decision since it was a Union government scheme, some others like Punjab and Maharashtra said they were awaiting the Centre’s feedback on extending it, and still some others like Chhattisgarh, Andhra Pradesh and Telangana, said they have their own free foodgrains scheme. These three states said they would continue distributing foodgrains free even if the Centre ended the scheme.
The cost, factors
The cost of continuing with the scheme for the next six months is estimated to be about Rs 80,000 crore. While extending it would be a political call, the government is closely looking at its buffer stock of wheat and rice which will be the key factor.
A government functionary said it was not so much the financial burden, but the position of buffer stock that will influence the final decision. “It is certainly a political decision. If the government decides to go ahead, the finance ministry is equipped to deal with it. But a decision is dependent on the buffer stock of rice and wheat,” said a source in the Union Ministry of Finance.
There are concerns on wheat stock because of lower output (106 million tonnes in 2021-22 compared with 109 million tonnes in 2020-21) and significantly lower procurement in the central pool (18.7 million metric tonnes this year compared with 43.3 million metric tonnes in the previous year). This has resulted in a depletion in wheat stock to a 14-year low. The latest stock as on September 1 is 25 million metric tonnes.
While the stock of rice is well above the buffer stock norms, the lower sowing in the current kharif season due to uneven monsoon in paddy growing states has caused some concerns. The Ministry of Agriculture’s data for the week-ended September 9 shows that the coverage was 393.79 lakh hectares compared with 414.31 lakh hectares last year. “There may be a shortfall of about 10-12 million tonnes in rice production in this kharif season,” said Sudhanshu Pandey, Secretary, Food, in the Department of Food and Public Distribution, on Friday at a press conference.
Sources in the Ministry of Agriculture said wheat stock in the central pool was around 25 million metric tonnes as on September 1, 2022—16.45 lakh metric tonnes lower than the wheat stock of 26.64 million metric tonnes on August 1 this year. The rice stock in the central pool stood at 24.6 million metric tonnes as on September 1, this year. However, this is separate from the un-milled paddy.
Under the PMGY Anna Yojana, 39.88 lakh metric tonnes foodgrains – 7 lakh metric tonnes wheat and 32.88 lakh metric tonnes rice – is allocated every month, sources said. Besides, 20 lakh metric tonnes wheat is required to meet the monthly allocation under NFSA. If the monthly allocation of wheat under the NFSA is added to PMGK Anna Yojana’s monthly distribution, the total quantity of wheat required in a month is around 27 lakh metric tonnes.
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So, for the remaining seven months (September-March) of the current financial year, a quantity of about 18.9 million metric tonnes of wheat would be required. This means that about 6.1 million metric tonnes wheat will be available as on April 1, 2023, which would be a little lower than the buffer requirement of 7.46 million metric tonnes as at the beginning of the financial year each year.
The sources also pointed out that officials in several states had pointed out that a number of beneficiary families of PMGK Anna Yojana were opting to sell the extra foodgrains allocated to them under the scheme during the Covid crisis and get money instead. “But the Centre decided to continue the scheme because the conclusion was that the families wanted to get money to meet other necessities and it was a crisis period. After all, the purpose of the scheme was to mitigate hardships faced by the poor during the pandemic,” said the source.
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