Date: 29/12/2022

Relevance: GS-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.

Key Phrases: PMGKAY, Malnutrition, NFSA), Objective, Subsidised, Community Kitchen, NFHS, Decentralised, Procurement, Decentralised, Procurement System.

Why in News?

• The Union Government has announced that Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) will be discontinued in its present form with effect from December 31.
• PMGKAY announced during the height of Covid to address the needs of the unemployed will be ‘merged’ with the National Food Security Act (NFSA).

Key Highlights:

• Now the 81.35 crore individuals, identified under the NFSA, 2013, will receive their usual five kg of food grains 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.

Logic Behind the Decision:

• The Centre has taken action with the rising cost of food subsidies in mind.
  • The budget for food subsidy for this fiscal (including NFSA and PMGKAY components until September) was of ₹2.07 lakh-crore.
  • However the bill has shot up by over ₹80,000 crore, largely as a result of the three-month extension of PMGKAY till December 3.
  • The increase on account of PMGKAY alone is about ₹60,000 crore.
• Another factor perhaps inducing the discontinuation of PMGKAY is that the FCI’s food stocks at present are sharply below last December’s levels.
  • The current stocks of rice and wheat in the Central pool, at 55.46 mt on December 1, are a third lower than a year ago.
  • The Centre would like to hold on to stocks, given the risk of market and weather-related shocks.
• The fiscal implications shouldn’t be too high as there is not much difference between issuing 50 mt of wheat/rice at Rs 2-3/kg and giving it out free.

PM Garib Kalyan Ann Yojana

• Pradhan Mantri Garib Kalyan Yojana was launched for the poor to help them fight the battle against Corona Virus.
• 80 crore individuals, i.e., roughly two-thirds of India’s population would be covered under this scheme.
• 80 crore poor people will get 5 kg of wheat or rice and 1 kg of preferred pulses for free every month.
• Each one of them would be provided double their current entitlement over the next three months (time period was increased).
• This additionality would be free of cost.

The NFSA,2013

• NFSA 2013 provides food and nutritional security to beneficiary households.
• Covers 75% of the rural and up to 50% of the urban population.
• Eligibility→2 categories.
  • Households under Antyodaya Anna Yojana (AAY).
  • Priority Households (PHs) by State Governments.
• Key Provisions:
  • 35kgs free food grains per month to each AAY household.
  • 5 Kgs subsidized food grains per person per month to PHs.
  • ₹6,000 Meal-maternity benefit to pregnant women and lactating mothers (during pregnancy+6 months post-delivery).
  • Food security allowance if non-supply of entitled food grains or meals.
  • Grievance redressal mechanisms at the district and state level.
• After merging PMGKAY with NFSA, 81.35 crore individuals, identified under the NFSA, 2013, will receive their usual five kg of food grains free of cost, as against the nominal rates of ₹3 or so that they pay now.

Does Allocating Bulk Ration Address India's Endemic Malnutrition?

• 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 (DCP).
• DCP has been adopted only by nine States and UTs for wheat and 16 for rice, despite having been in existence for 24 years.

Conclusion:

• A panel should look into the issue of why PDS has not been diversified to include pulses, edible oils and coarse grains yet.
• With community kitchens, a market can be created for these crops, and even vegetables. The Supreme Court, had earlier, urged the Centre to come up with a plan for community kitchens.
• All farm price support and input subsidies should be replaced with per-hectare income transfers, which will complement the limited grain entitlement for poor and vulnerable consumers under the NFSA.

Source: Business Line

Mains Question:

Q. Why is the Centre right in not extending the Pradhan Mantri Garib Kalyan Anna Yojana scheme? Comment (150 words).