The Centre on Wednesday decided to extend the free foodgrain scheme for those below the poverty line (BPL), which had benefitted 80 crore people,  for another three months ending December 31, 2022. This will be the seventh phase of the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) which will cost the Centre an additional ₹₹44,762 crore.

“In view of the festival season, the government has decided to continue the PMGKAY for another three months,” Information and Broadcasting Minister Anurag Thakur told the media after the Cabinet meeting.

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Before the Cabinet meeting, there was a question mark if the scheme would be continued given the foodgrain stocks with the Centre. According to Food Corporation of India (FCI) data, rice stocks were 24.46 million tonnes (mt) as of September 1, while wheat stocks were 24.82 mt and 16.16 mt of unmilled paddy (11.31 mt of rice), which are well above the stipulated buffer stock norms. 

After the extension for three months, the closing stocks with the FCI in the current fiscal will be about 11 mt of wheat and about 22.5 mt of rice, more than the buffer norms. The buffer norms, including strategic reserves, prescribe 7.46 mt of wheat and 13.58 mt of rice as on April 1.

“Next paddy procurement season, starting from October 1 will be key to take any decision on whether PMGKAY will be implemented in 2023-24 fiscal. Even the decision to extend it after December will depend on the quantity of rice purchased in the next three months as we do not know about the wheat crop that will be sown from November,” said an official.

One of the concerns raised against the extension of the scheme was the fear over kharif rice production, which has been affected by deficient rainfall in key growing areas. The Ministry of Agriculture has estimated kharif rice production at 104.99 against 111.32 mt last year. 

A trade analyst said the scheme has been extended for three months mainly to assess how the kharif rice procurement beginning on October 1 proceeds and the global food situation besides inflation. 

An official statement said: “In pursuance of the pro-people announcement made by the Prime Minister (Narendra Modi) in 2021 and successful implementation of additional food security under PMGKAY, the Union Cabinet has approved the extension for the  Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY-Phase VII) for a further period of 3 months.”  

It said India has been successful in maintaining food security for the vulnerable section among its population while taking necessary steps to ensure availability and affordability for the common man. This had been done at a time when the world is battling with the effects of the Covid pandemic and insecurity due to various reasons.  

The vulnerable section of the population will be supported during major festivals such as Navratri, Dasar, Milad-un-nabi, Diwali, Chhath pooja, Gurunanak Dev Jayanti and Christmas. The vulnerable can celebrate with “great gaiety”, the statement said, adding that the extension of the scheme will ensure that they do not face “any financial distress”.

Under PMGKAY, 5 kg of foodgrain per person is distributed through ration shops every month free of cost for all beneficiaries covered under the National Food Security Act (Antodaya Anna Yojana & Priority Households), including those covered under Direct Benefit Transfer (DBT).

The analyst said the Centre is keen on continuing PMGKAY since it is paying political dividends for the Bharatiya Janata Party and its allies. 

“Besides, if the PMGKAY is discontinued it can lead to the beneficiaries coming to the open market to buy rice. It would have pushed up the prices as we have seen in the case of wheat, where discontinuation of supply in 5 States has led to increased demand,” the analyst, who did not wish to be identified, said. 

(With inputs from Subramani Ra Mancombu, Chennai)