Why is it in the news?

• Indian Prime Minister has recently announced a five-year extension of the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), a scheme providing 5kg of free foodgrains to eligible ration cardholders under the National Food Security Act, 2013 (NFSA).
• This extension aims to continue addressing food security needs and supporting vulnerable populations.

PMGKAY

• PMGKAY was initiated in 2020 during the COVID-19 pandemic.
• Initially set to expire in December 2022, it was extended to December 2023 and now for an additional five years.
• Over 1,118 lakh metric tonnes of foodgrains have been allocated, costing Rs 3.9 lakh crore.

 National Food Security Act, 2013 (NFSA)

• NFSA, introduced in 2013, shifts the approach to food security from welfare to a rights-based approach.
• It entitles up to 75% of the rural population and 50% of the urban population to subsidized food grains.
• Beneficiaries include Antyodaya Anna Yojana (AAY) and Priority Households (PHH), with ration cards issued in the name of the eldest woman in the household.
• AAY households receive 35 kg of foodgrains monthly, while PHH receive 5 kg per person per month.

Merger of PMGKAY and NFSA

• In January 2023, PMGKAY was integrated into NFSA, providing all rations for AAY and PHH families at no cost.
• This merger eliminated extra provisions introduced during the COVID-19 pandemic by incorporating them into NFSA.

Impacts of PMGKAY Extension:

Positive Impacts:

• Addresses immediate food security needs, ensuring access to essential food during crises.
• Supports local farmers and rural economies through foodgrain procurement.
• Promotes social cohesion and collective responsibility.

Negative Impacts:

• Incurs significant fiscal costs and risks straining the fiscal deficit.
• Disrupts market dynamics and may distort agricultural prices.
• Creates dependency and may not be a sustainable long-term solution.
• Encourages competitive populism and inconsistent policies.

Measures needed:  

• Introduce digital vouchers (e-Rupi) for targeted beneficiaries to purchase nutritious food.
• Develop technology platforms for efficient distribution of excess food to those in need.
• Invest in economic empowerment programs like skill development and job training.
• Gradually reduce subsidies while implementing alternative support systems to avoid shocks to vulnerable populations and the economy.