Almost 9% of Delhi’s free foodgrain beneficiaries under PMGKAY are ineligible, according to a government survey. 

• Of the 6.5 lakh ineligible beneficiaries, around 96,000 are car-owners and over 89,000 also avail similar benefits in other states.

About Food Security and India’s Public Distribution System

• Food security: Food security transcends mere availability of sufficient food grains within a country; it rests on three fundamental pillars:
  • Availability: Ensuring an adequate supply of grain within national borders.
  • Accessibility: Guaranteeing that food grains can reach the common populace, including those in remote areas.
  • Affordability: Making certain that food grains are not prohibitively expensive and remain within the financial reach of the common person.
• Public Distribution System :To uphold this crucial food security, India operates the Public Distribution System (PDS), recognised as the world’s largest food distribution network. 
  • Under the PDS, the government procures food grains, primarily rice and wheat, at Minimum Support Price (MSP) from farmers. 
  • These grains are stored in Food Corporation of India (FCI) godowns before being distributed to those in need through Fair Price Shops (FPS).
• National Food Security Act (NFSA): In 2013, the government enacted the National Food Security Act (NFSA), which transformed the provision of food grains from a welfare approach to a legal right.
  • This act mandates benefits for 75% of the rural population and 50% of the urban population, covering approximately 80-81 crore people. 
  • Beneficiaries under NFSA are categorised into two groups: 
    • Antyodaya Anna Yojana (AAY): The poorest of the poor, receiving 35 kg of food grain per household per month.
    • Priority Households (PHH): Receiving 5 kg of food grain per person per month.

Emergence and Extension of PMGKAY

• The Prime Minister Garib Kalyan Anna Yojana (PMGKAY) was introduced in 2020 as a temporary scheme during the unprecedented COVID-19 pandemic. 
• Its primary objective was to provide an additional 5 kg of free food grain to all NFSA beneficiaries, serving as a crucial lifeline during a period of widespread job losses and economic distress. 
• Experts, such as Jean Drèze, hailed it as a “life saver” for crores of people.
• Despite its initial temporary nature, the government decided at the end of 2023 to extend PMGKAY for another five years, until December 2028. 
• This extension means that approximately 80 crore people currently receive benefits from both the NFSA and the additional 5 kg from PMGKAY.

Financial Implications of PMGKAY’s Extension

• Over the five-year extension period, the scheme is projected to incur an expenditure of 11.8 trillion INR. 
• This translates to an annual cost of 2.36 trillion INR, representing a significant portion of the nation’s total budget.

Concerns with PMGKAY

• Significant Inclusion Error: A major concern is that the scheme is not reaching only the deserving. Data from Delhi reveals that approximately 9% of beneficiaries are ineligible, amounting to 6.5 lakh people. 
  • On a national level, even with clear eligibility criteria (e.g., no government job, annual income below 1 lakh INR, no four-wheeler, not an income tax payer), 6% of beneficiaries (out of 76 crore with ration cards) are found to be ineligible. This points to systemic leakages and corruption.
• State Government Reluctance to Act: The Central Government has instructed states to verify data and remove ineligible beneficiaries by September 2025. 
  • However, state governments are reluctant to undertake this cleanup. 
  • Their arguments include:
    • The Centre took full credit for launching the scheme, so it should not shift the burden of removing beneficiaries to the states.
    • Cleaning up beneficiary lists is politically unpopular, as it would mean “upsetting voters”.
• Limited Financial Savings from Cleanup: Even if the lists were perfectly cleaned, the estimated annual saving would only be 14,000 crore INR. 
  • Compared to the annual expenditure of 2.36 trillion INR, this is a relatively small amount, which further discourages states from taking on the political risk of voter dissatisfaction.
• Flawed Premise of Beneficiary Count: The scheme currently provides food grains to 80 crore people. 
  • However, according to the Multi-dimensional Poverty Index, only 21 crore people in India are officially considered poor. 
  • This significant disparity suggests that the scheme’s reach is far wider than the actual number of those in poverty, implying over-inclusion.
• Impact of New Tax Provisions: A new tax provision, effective this year, exempts individuals with an income of up to 12 lakh INR from paying income tax. 
  • This could worsen the inclusion error, as many who paid tax previously (and were therefore ineligible) may now cease paying tax and continue to receive scheme benefits, making it harder to identify and exclude them.

Measures To Reform PMGKAY

• Better Targeting: Instead of extending extra food grain to 80 crore people, the scheme could be better targeted towards the truly needy.
  • A primary suggestion is to limit the additional food grain provision to the “poorest of the poor” beneficiaries who fall under the Antyodaya Anna Yojana (AAY), currently numbering around 8.1 crore people.
  • Alternatively, if the scheme must remain universal, the quantity of food grain provided could be reduced for those who are not as poor, while ensuring sufficient provision for the most vulnerable.
• Direct Benefit Transfer (DBT): Transitioning to a Direct Benefit Transfer (DBT) system, where cash is transferred directly to beneficiaries’ bank accounts, could significantly reduce leakage and corruption.
  • DBT also offers beneficiaries the choice to purchase food grains of their preference from the open market.
  • However, DBT also presents challenges, such as the risk of money being spent on non-food items (e.g., alcohol) and difficulties in reaching beneficiaries in remote areas without proper banking infrastructure.
• Reinvestment of Saved Funds: Reforming PMGKAY and making it more efficient would free up substantial funds. 
  • These savings could then be reinvested into other critical sectors like education and health, which are vital for long-term human development and poverty alleviation.

Conclusion

The Prime Minister Garib Kalyan Anna Yojana played a crucial role during a national crisis.

• However, its re-evaluation is necessary to ensure that the generous provision of free food grain effectively serves its purpose of alleviating hunger among the most vulnerable, while also allowing the government to allocate resources optimally for the nation’s broader developmental goals. 

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