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Closing Pradhan Mantri Garib Kalyan Anna Yojana

Context

  • The Union Government has announced that the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) will be phased out in its current form on December 31.
  • PMGKAY announced during the height of Covid that the unemployed’s needs would be’merged’ with the National Food Security Act (NFSA).

Relevance:

GS Paper-3: Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System- objectives, functioning, limitations, revamping; issues of buffer stocks and food security.

Mains Question

Why is the government correct not to extend the Pradhan Mantri Garib Kalyan Anna Yojana scheme? Comment (150 words)


Highlights include:

  • The 81.35 crore people identified under the NFSA, 2013, will now receive their usual five kg of food grains free of charge, as opposed to the nominal rates of 3 or so that they currently pay.
  • However, the 10 kg they have been receiving for the past two years will come to an end.

The Decision’s Justification:

  • The Centre has taken action in response to the rising cost of food subsidies.
  • The food subsidy budget for this fiscal year (including NFSA and PMGKAY components until September) was Rs 2.07 lakh crore.
  • However, the bill has risen by over 80,000 crore, owing largely to the three-month extension of PMGKAY until December 3.
  • The increase due to PMGKAY alone is approximately 60,000 crore.
  • Another factor that could lead to the discontinuation of PMGKAY is that the FCI’s food stocks are currently significantly lower than they were in December.
  • The Central pool’s current rice and wheat stocks, at 55.46 mt on December 1, are one-third lower than a year ago.
  • Given the risk of market and weather-related shocks, the Centre would prefer to hold onto stocks.
  • The fiscal implications should be minimal because there is little difference between issuing 50 mt of wheat/rice at Rs 2-3/kg and giving it away for free.

PM Kalyan Garib Pradhan Mantri Ann Yojana

  • The Mantri Garib Kalyan Yojana was created to assist the poor in their fight against the Corona Virus.
  • This scheme would cover 80 crore people, or roughly two-thirds of India’s population.
  • Every month, 80 crore poor people will receive 5 kg of wheat or rice and 1 kg of preferred pulses for free.
  • Over the next three months, each of them would receive double their current entitlement (time period was increased).
  • This feature would be free of charge.

The NFSA,2013

  • NFSA 2013 provides beneficiary households with food and nutritional security.
  • Covers up to 50% of the urban population and 75% of the rural population.
  • Two eligibility categories exist.
  • Antyodaya Anna Yojana households (AAY).
  • State governments designate priority households (PHs).
  • Important Provisions:
  • Each AAY household receives 35kgs of free food grains per month.
  • PHs receive 5 kg of subsidised food grains per month.
  • ₹6,000 Meal-maternity benefit for pregnant and lactating mothers (during pregnancy and for 6 months after delivery).
  • Food security allowance if eligible food grains or meals are not available.
  • Mechanisms for resolving complaints at the district and state levels.
  • Following the merger of PMGKAY and NFSA, 81.35 crore individuals identified under the NFSA, 2013, will receive their usual five kg of food grains free of charge, as opposed to the nominal rates of 3 or so that they currently pay.

Does Bulk Rationing Address India’s Endemic Malnutrition?

  • The endemic malnutrition in India, as revealed by the fifth round of NFHS, cannot be addressed by allocating bulk rations.
  • It requires a distinct fiscal and policy thrust, one aspect of which is the establishment of a diverse and decentralised procurement system (DCP).
  • Despite being in place for 24 years, DCP has only been adopted by nine States and UTs for wheat and 16 for rice.

Conclusion:

  • A panel should investigate why PDS has not yet been diversified to include pulses, edible oils, and coarse grains.
  • Community kitchens can help create a market for these crops, as well as vegetables. The Supreme Court had previously urged the Centre to develop a plan for community kitchens.
  • All farm price supports and input subsidies should be replaced with per-hectare income transfers to supplement the NFSA’s limited grain entitlement for low-income and vulnerable consumers.

February 2023
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