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LATEST NEWS UPDATES | Understanding the rejig in India’s food security programme -Roshan Kishore and Pavitra Kanagaraj

Understanding the rejig in India’s food security programme -Roshan Kishore and Pavitra Kanagaraj

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published Published on Dec 29, 2022   modified Modified on Dec 29, 2022

-Hindustan Times

India’s Public Distribution System (PDS) after the enactment of the National Food Security Act (NFSA) promises 5kg foodgrain per persons at a highly subsidised cost of 3/kg for rice, Rs.2/kg for wheat and Rs.1/kg for cereals. The government will stand to lose this revenue after the decision to make PDS entitlements free.

New Delhi: On December 24, the Union government announced a rejig of India’s food security programme. It has discontinued the Pradhan Mantri Garib Kalyan Yojna (PMGKY) after December 2022 but made the usual Public Distribution System (PDS) entitlements completely free until December 2023. PMGKY was introduced in April 2020 after the Covid-19 pandemic and it gave 5kg of additional foodgrain to more than 800 million people. India’s Public Distribution System (PDS) after the enactment of the National Food Security Act (NFSA) promises 5kg foodgrain per persons at a highly subsidised cost of Rs.3/kg for rice, Rs.2/kg for wheat and Rs.1/kg for cereals. The government will stand to lose this revenue after the decision to make PDS entitlements free. Here are four charts that explain the rejigging of India’s food security programme in detail.

The latest decision will bring down the government’s food subsidy bill

The free foodgrain scheme under PMGKY is among the most expensive post-Covid measures on the fiscal side. The government’s own estimates put the cumulative cost of the scheme at Rs.3.91 lakh crore. This led to a significant increase in the government’s food subsidy bill, and ended up being significantly higher than budgetary allocations in 2020-21, 2021-22 and 2022-23. A Nomura research note estimates that food subsidy spending (as a share of GDP) will come down significantly in 2023-24, which is clearly on account of the latest decision by the government.

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Hindustan Times, 29 December, 2022, https://www.hindustantimes.com/india-news/understanding-the-rejig-in-india-s-food-security-programme-101672251439489.html


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