The government on Friday decided to provide free foodgrains to 81.35 crore people for one year under the National Food Security Act (NFSA) at an estimated cost of Rs 2 lakh crore.

Currently, the beneficiaries covered under the NFSA pay Rs 1-3 per kg.

Details of Centre's free foodgrain distribution move

Under the Act, foodgrain is allocated at 5 kg per person per month for priority households category and at 35 kg per family per month for Antodaya Anna Yojna (AAY) families at highly subsidised prices of Re 1, Rs 2 and Rs 3 per kg for coarse cereals, wheat and rice, respectively.

With the Cabinet decision on Friday, beneficiaries under NFSA will get foodgrains free of cost for one year till December 2023.

The decision comes days ahead of the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) ending on December 31, 2022.

Under the PMGKAY, which was launched in April 2020 to provide relief to the poor during the Covid-19 pandemic, 5 kg of foodgrain is being provided free of cost to about 80 crore people over and above the NFSA quota.

"The Prime Minister has taken a historic decision of providing foodgrain to the poor free of cost. A total of 81.35 crore people would benefit," Food Minister Piyush Goyal told reporters after the Cabinet meeting.

The move will entail an expenditure of about Rs 2 lakh crore for the exchequer, he said, adding the entire cost will be borne by the Union government.

Government officials described the latest Cabinet decision as a "new year gift for the country's poor", saying that over 81.35 crore people will now get free foodgrains under NFSA.

The beneficiaries will not have to pay a single rupee to get foodgrains, they added.

The Centre enacted NFSA in July 2013, giving legal entitlement to 67 per cent of the population (75 per cent in rural areas and 50 per cent in urban areas) to receive highly subsidised foodgrain.

The coverage under the Act is based on the population figures of Census 2011. The NFSA is being implemented in all 36 states/UTs and covers about 81.35 crore persons.

PMGKAY merged with NFSA

Asked if PMGKAY would be extended beyond December 31, 2022, the minister said the scheme has been merged with NFSA.

Goyal further said the additional foodgrain under the PMGKAY, which was started during COVID because of financial stress on poor people, is not needed now as "financial conditions have now become normal. Still, to provide relief to poor the government has made foodgrain under NFSA free of cost."

On the PMGKAY, Goyal said the government provided free foodgrain (5 kg per person per month) for 28 months to ensure that no one sleeps on an empty stomach during the pandemic.

The PMGKAY was initially launched for three months till June 2020 (phase I) and then extended several times.

The second phase of the scheme was July-November 2020; third phase May-June 2021; fourth phase July-November 2021; fifth phase December 2021-March 2022; sixth phase April-September 2022; and seventh phase October-December 2022.

Recently, in a written reply in the Lok Sabha, Goyal had said that under the PMGKAY, the government has allocated a total of almost 1,118 lakh tonnes of foodgrains to the states/UTs (total allocation from Phase I to Phase VII).

The total sanctioned outlay for food subsidy and central assistance for all phases I-VII is about Rs 3.91 lakh crore, he said.

With the government deciding not to provide extra foodgrains over and above NFSA quota, experts said the decision will ease the pressure on foodgrain stocks under the central pool.

The government had to ban wheat exports in May to control inflation after its procurement fell sharply. Domestic production of wheat also fell slightly in 2021-22.

About 159 lakh tonnes of wheat and 104 lakh tonnes of rice will be available as on January 1, 2023, as against the respective buffer norms requirement of 138 lakh tonnes of wheat and 76 lakh tonnes of rice as on January 1, the government recently said.?