It did not come as a surprise when the Centre, on December 23, announced that the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), announced during the height of Covid to address the needs of the unemployed, will be ‘merged’ with the National Food Security Act (NFSA). The PMGKAY will be discontinued in its present form with effect from December 31; thereafter, 81.35 crore individuals, identified under the NFSA, 2013, will receive their usual five kg of foodgrains free of cost, as against the nominal rates of ₹3 or so that they pay now. However, the 10 kg that they have been getting for two years will stop.
The move makes sense in many ways. It is clear that the Centre has acted with an eye on the ballooning food subsidy bill. Against the budgeted sum of ₹2.07 lakh-crore for food subsidy for this fiscal (including NFSA and PMGKAY components until September), the bill has shot up by over ₹80,000 crore, largely as a result of the three-month extension of PMGKAY till December 31. The increase on account of PMGKAY alone is about ₹60,000 crore, while allocation for decentralised procurement (DCP) has been raised by about ₹10,000 crore over the budgeted sum of ₹60,000 crore, which is in keeping with the trend of ₹70,000 crore towards DCP. The third factor perhaps inducing the discontinuation of PMGKAY is that the FCI’s foodstocks at present are sharply below last December’s levels. The Centre would like to hold on to stocks, given the risk of market and weather-related shocks. With the economy having shrugged off the 2020-21 Covid impact, PMGKAY was bound to go — with food inflation expected to abate.
Besides, India’s endemic malnutrition, borne out by the fifth round of NFHS, cannot be addressed by an allocation of bulk rations. It needs a different fiscal and policy thrust — one aspect of which is to create a diversified and decentralised procurement system. Such a system can feed into a network of community kitchens that cater to local tastes. A Parliamentary standing committee report on DCP, tabled this month, raps the NITI Aayog for not coming up with a report assessing the performance of DCP, after being entrusted with the task in 2017. DCP has been adopted by nine States and UTs for wheat and 16 for rice, despite having been in existence for 24 years.
However, the panel does not look into the issue of why PDS has not been diversified to include pulses, edible oils and coarse grains. With community kitchens, a market can be created for these crops, and even vegetables. The Supreme Court, last November, urged the Centre to come up with a plan for community kitchens, in response to which the latter entrusted the task to a group of secretaries. Little has been heard on the matter since then. It is not clear why community kitchens have not picked up in most States. In sum, PDS reform deserves fiscal support.