In a blend of fiscal responsibility and the commitment to a social safety net, the Union government announced on Friday its intention to distribute free foodgrains to beneficiaries under the National Food Security Act, 2013, in accordance with their entitlements for the year starting January 2023. However, the government has decided to discontinue the Pradhan Mantri Garib Kalyan Anna Yojana initiated in April 2020 during the Covid-19 pandemic, where 5 kg of complimentary foodgrains were provided to individuals in addition to their NFSA entitlement at subsidized rates.
Union Food Minister Piyush Goyal, briefing reporters on the Cabinet decisions, stated, “The Prime Minister has taken a historic decision to provide food security to the poor free of cost across the country.” The NFSA, covering approximately 81.35 crore people, will now see the central government bearing the entire cost of Rs 2 lakh crore to ensure free food security. Goyal clarified that the PM Garib Kalyan Anna Yojana has been merged with the NFSA, with the free portion of that scheme incorporated into the NFSA.
Under the NFSA, which encompasses 50% of the urban population and 75% of the rural population, two categories of beneficiary households exist – Antyoday Anna Yojana (AAY) and Priority Households. AAY households are entitled to 35 kg of foodgrains per month, regardless of family size, while priority households receive foodgrains based on family size (5 kg per member per month).
This move marks the introduction of a Central food security legislation in India, granting the poor the ‘right’ to receive 5 kg of foodgrains free of charge. Previously, the impoverished, constituting 81.34 crore people, paid a nominal price for rice and wheat. The discontinuation of PM Garib Kalyan Anna Yojana is expected to soften the impact on the poor, with the government saving Rs 15,000 crore per month or about Rs 1.8 lakh crore annually.
Despite the discontinuation, concerns arise as foodgrain stocks have depleted, with wheat just above buffer stock requirements. The government’s expenditure on subsidized foodgrains under the NFSA is expected to increase to about Rs 2 lakh crore with this decision, balancing the savings from discontinuing PM Garib Kalyan Anna Yojana.