Covid-19 relief: Centre mulls extending scheme for free grains and pulses

For wheat, rice and pulses (notably chana), the central government has enough stock to ensure additional supplies for the next 3-4 months

The Centre is “actively considering” extending the scheme for free distribution of food grains and pulses under the Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY) for another 3-4 months, according to sources. This might provide relief to millions of poor families affected by the pandemic, especially as another surge is being witnessed in Covid-19 cases.

For both wheat and rice, as also pulses (notably chana), the central government has enough stock to ensure additional supplies for the next 3-4 months. A number of senior officials confirmed to Business Standard that details had been sought from various agencies that had been involved in the distribution of grains and pulses through public distribution system (PDS) in the first eight months of this financial year.

The highest echelons of power were seized of the matter, the officials said, noting that free distribution of grains and pulses had made a significant difference to the lives of millions of poor – both during the lockdown months and after the restrictions were eased.

However, sources did mention that the financial impact of extending the scheme would also be playing on the minds of the decision makers, especially given the government’s stretched financial position amid a pandemic-induced slowdown.

Under the PMGKAY (Phase-I and -II), which started in April and is due to end in November, the central government has distributed 5 kg of additional wheat and rice per month to almost 800 million beneficiaries of the National Food Security Act (NFSA), over and above their usual entitlement of 5 kg per person per month.
 

Additionally, the government has distributed 1 kg of free pulses (mostly chana) to every NFSA family – nearly 200 million – in the past eight months.

In total, according to government estimates, around 32 million tonnes of wheat and rice have so far been made available for free distribution under the scheme, along with around 1.4 million tonnes of pulses (the bulk of which is chana).

As on October 31, 2020, according to officials, the Food Corporation of India (FCI) had wheat and rice stocks of around 58.81 million tonnes (including 1.72 million tonnes of unmilled paddy lying with millers), compared with the grain stock requirement of 30.77 million tonnes as on  October 1. This meant foodgrain stock in the central pool was around 91 per cent more than required as on October 31.

If the PMGKAY gets extended for another four months, till March, considering the same level of allocation, an additional 16 million tonnes of grains would be drawn from the central pool, much less that the surplus stored as of October-end.

Similarly, in case of pulses (mainly chana), officials said, assuming an allocation of 0.24 million tonnes of chana per month for free distribution (based on last eight months’ analysis) an additional 0.8-0.9.5 million tonnes would be required over the next three-four months; the current chana stock with Nafed is much more than that.

“When it comes to the stock of grains or pulses, there should be no concern, as there are ample inventories. Moreover, in case of chana, new harvest will start hitting the market by March, while in case of grains, rice procurement in the new 2020-21 season that started from late September is already 18.25 per cent more than the previous year,” an expert said.

Recently, a group of civil society activists, under the Right to Food Campaign, had written a letter to Prime Minister Narendra Modi, seeking an extension of free food grain distribution under the Garib Kalyan Anna Yojana for another six months. They also asked for a universalisation of the PDS, as FCI had sufficient food grain in its inventories.

But, finances would remain a consideration while extending the scheme.

According to official estimates, the central government is projected to incur an additional food subsidy of almost Rs 1.23 trillion in 2020-21, over and above the usual requirement of Rs 1.80 trillion (this also includes subsidy to FCI and decentralised procurement states) for distributing around 32 million tonnes (mt) of additional grains in FY21 through the two tranches of the PM Garib Kalyan Yojana and one of Atmanirbhar Bharat.

This will be over and above the usual sale through PDS and other welfare schemes of around 55 million tonnes of wheat and rice. In addition, it is estimated to incur a subsidy of around Rs 8,000 crore towards free distribution of pulses in the past eight months.

No Dearth

• A snapshot of the Garib Kalyan Ann Yojana in the past eight months
• 32 million tonnes: Total extra wheat and rice allocated for free distribution
• 1.45 million tonnes: Total pulses allocated for free distribution
• Rs 1.23 trillion: Total extra subsidy estimated in free grain distribution
• About Rs 8,000 crore: Total extra subsidy estimated in free pulses distribution

Source: Government and Trade sources