Food subsidy bill likely to touch record ₹3.94L cr on relief scheme
The Centre’s food subsidy bill is likely to touch a record ₹3.94 lakh crore this fiscal mainly on account of the Pradhan Mantri Garib Kalyan Anna Yojana, a Covid-relief scheme to give 5 kg of free grains every month to about 800 million beneficiaries of the National Food Security Act, official estimates show.
The Centre’s food subsidy has spiralled since 2020 on account of this pandemic relief measure. Total expenditure in 2021-22 stood at ₹2.94 lakh crore, 140% higher than the subsidy amount in 2020-21 and about 267% more than in 2019-20.
The Union Budget presented on February 1 projected the Centre’s total subsidy bill for FY23 at ₹3.56 lakh crore, but this is likely to go up on account of the Cabinet’s decision to extend the free-food programme and higher international prices of fertilisers, an official said, requesting anonymity.
The Centre has so far spent
₹2.60 lakh crore on the free food scheme. Another ₹80,000 Crore will be spent over the next 6 months till September 2022, taking the total food subsidy under the PMGKAY to nearly ₹3.40 lakh crore, the official said.
The free food scheme, which was initially announced for a quarter and now extended till September 2022, has shielded poor from hunger and food price shocks.
According to a World Bank working paper on the government’s pandemic relief measures, led by authors Shrayana Bhattacharya and Sutirtha Sinha Roy, “nearly 80% of all households received at least one social protection benefit from government programs” and “approximately 40% of all poor households reported receiving both food and cash assistance”.
Their analysis, which drew on one of India’s largest panel survey of households, found the relief measures were “pro-poor and broad-based in outreach” but had “state-level variations in benefit delivery”.
The Centre had allocated about 75.9 million tonne of free foodgrains under the PMGKAY till March. With another 24.4 million tonne of free foodgrains under the latest extension, the aggregate allocation of free foodgrains now stand at 100.3 million tonne.
In 2020, during the first wave of the pandemic, the government had announced 5kg of free foodgrains per person per month, over and above the entitlements of 5kg of wheat or rice at ₹2 and ₹3 a kg under the food security Act.