NFSA and PMGKAY ensured a basic supply of 10 kgs per person which was a lifeline for the millions of daily wagers, unorganised sector workers, construction workers who lost their livelihoods during the pandemic and lockdowns and yet to recover. With prevailing high (nearing 13 percent), whole sale and retail inflation and resulting high food prices, dwindling manufacturing and no new jobs the poor continue to suffer. Life is becoming harder as prices of many other essential items—vegetables, milk, vegetable oil and cooking gas are increasing. For example the consumer price of wheat attain creased by 18 percent (almost similar the price rise of rice) between August and October quarter.
However, the bitter pill is sugar coated by the announcement, that for one year starting from January 2023 the foodgrains under National Food Security Act, 2013, (NFSA) will be provided free of cost and waiving their cost.
Many economists associated with Union government have been shouting from roof tops to end food subsidy being provided to poor through PDS. Dr Ramesh Chand, member, NITI Aayog and one of the most respected agriculture economists, says that there is no justification for extending the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) beyond December 2022. Similarly, Dr Surjit Bhalla in his 2021 IMF Working paper, that less than one percent of Indians are in extreme poverty (that is they are living on less than purchasing power parity of 1.9 dollar per person per day). Ironically the prevailing hunger in the country is not visible to these wise economists and they never question bounty of corporate and other taxes, lakhs of crore NPA loan waiver freebies gifted to corporates.
It was widely believed that the victory of BJP in 2022 in UP elections despite prevailing wide discontent was due to free ration provided under PMGKAY at the time elections.
By combining both schemes (NFSA+PMGKAY) and cutting entitled ration by half, the government is gaining by reducing food subsidy, but also lowers burden on grain reserves and is saving money. On one hand, government is discouraging FCI grain procurement by paying MSPs and on other hand saving huge budget allocations on food subsidy. Stopping PMGKAY and making NFSA foodgrains free would save the government about 1.56 Lakh crores a year. (IPA Service)
FREE FOOD SUPPLY IS FINE BUT WHY CUT RATION ENTITLEMENT TO THE POOR?
CENTRE WILL SAVE HUGE FUNDS FOLLOWING ITS REVAMPED POLICY
Dr. Soma Marla - 2023-01-13 11:34
On December 23, 2022, the Union government announced that it would discontinue the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) from January 1, 2023 and provide ration free of cost. This was hailed as a ‘historic’ decision. But in reality this in no way compensates for the huge reduction in the ration entitlement. It simply cuts the ration by 50 percent that is to nearly 81.3 crores of poor entitled under National Food Security Act (NFSA). As consequence, from January onwards, as the ration entitlement is halved, they will be entitled to only five kgs of ration per person (under regular NFSA) instead of the current 10 kgs of ration per person (NFSA+PMGKAY).