Govt’s free food policy to cost over ₹67,000 cr
NEW DELHI: The government’s decision to offer free food grains to vulnerable sections of the society announced earlier this month by Prime Minister Narendra Modi is expected to cost over ₹67,266 crore to the exchequer.
An official statement said that the union cabinet on Wednesday cleared the plan to extend free food grain supply till November. Free food grains under PM Garib Kalyan Ann Yojana (PMGKAY) was introduced last year during the first wave of the pandemic and was recently resumed for two months—May and June. Modi had announced on June 7 that this will be extended till Deepavali.
Free food grain supply will benefit a maximum of 81.3 crore individuals covered under the targeted public distribution system. Each individual will receive five kilogram of food grain for five months. The cost would entirely be on the central government. Including transportation cost of ₹3,234.85 crore, the total cost for the five-month extension of food grain supply will be ₹67,266.44 crore, said the statement.
“Additional allocation will ameliorate the hardships faced by the poor due to economic disruption,” said the statement.
This free-food grain supply is over and above the monthly entitlement of subsidised food grain under the food security law. It covers upto three fourth of the rural population and half of the urban population.
After announcing the union budget for FY22 with a focus on higher capital spending and health care initiatives including vaccination, the government’s focus has been to get the allocated funds to be spent in the initial part of the year to support economic revival. The RBI too offered liquidity boosting and loan recast measures. While the Centre has extended the free food grain scheme in view of the second wave of the coronavirus pandemic, businesses are demanding further steps to help micro, small and medium enterprises to tackle its impact. Businesses are now emphasising on possible measures that will help consumption to get a boost.
The cabinet also cleared merger of Central Warehousing Corporation’ (CWC), a state-run company, with its subsidiary Central Railside Warehouse Company Ltd (CRWC) with the idea of improving efficiency, capacity utilisation and financial savings, said another statement.
The decision leads to transfer of all assets, liabilities, rights and obligations of CRWC, to its holding entity, CWC. The merger will unify similar functions of both the companies--such as warehousing, handling and transportation—under one administration, said the statement. This will promote efficiency, optimum capacity utilization, transparency, accountability and ensure financial savings, the statement said.