On December 23, the Cabinet decided not to extend the free ration scheme for Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). However, the government will provide grains under the National Food Security Act (NFSA) free of cost to the 813 million beneficiaries till 2023.

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Food over 5 kg per person per month is available at a highly subsidised rate under the NFSA. According to the Indian government guidelines, rice is charged at Rs 3 per kg and wheat at Rs 2 per kg. In addition, households covered by the Antyodaya Anna Yojana (AAY) scheme receive 35 kilograms of grain per month.

Since the first wave of Covid-19 in April 2020, about Rs 3.91 trillion in free rations have been distributed. Since its launch, the program has run continuously and been extended several times, except from December 2020 to April 2021. The most recent extension was for three months until December 31, 2022.

Under the PMGKAY, 800 million people receive free 5kg of food per month. The Centre has allocated 111.8 million tonnes of foodgrains to states and Union Territories for a free ration scheme.

The estimated financial cost of PMGKAY is based on the economic cost of food. The actual cash cost will be a fraction of this when the food’s open market price is considered. Also, the Cabinet must address grain stocks in India, especially wheat.