Analysing a 'masterstroke': Modi govt cuts food allocation for the poor

This is no 'merger' of two foodgrain schemes but rescinding one scheme altogether

The Narendra Modi government on Saturday, December 31, 2022, issued the notification for a "new scheme" to provide "free food grains to 81.35 crore beneficiaries under the NFSA, for the year 2023," said a release by the Press Information Bureau (PIB). This is "as per the decision made by the cabinet, led by Prime Minister, Shri Narendra Modi," the PIB said.

At the same time, the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), providing 5 kg foodgrain free to 80 crore poor Indians, was terminated with effect from December 31, 2022. "It has been merged with the scheme under the National Food Security Act (NFSA) under which foodgrain will now be provided free of cost to 81.35 crore people," the Union Minister for Food and Public Distribution Piyush Goyal had said earlier. The total bill for free foodgrain under the NFSA is estimated to be around Rs 2 lakh crore.

Goyal said the decision to provide free foodgrain under the NFSA would "remove the financial burden of the poor and the poorest of the poor" and showed the "sensitivity of the prime minister towards the beneficiaries of welfare schemes". As if out of habit, he termed it a "historic decision". It has been presented as such by a large section of the media, too.

Also read | Can Narendra Modi's popularity sell Centre's cut in food rations?

While the decision may not be "historic", it was undoubtedly a "masterstroke" of sorts. It has earned the government good press and boosted Modi's image further, even as it brings down the food allocation to every poor and helps the government save thousands of crores it was spending on food. This is no "merger" of two foodgrain schemes. It is rescinding one scheme altogether.

Till December, the priority category ration card holders were getting 5 kg foodgrain under the NFSA at subsidised rates – rice at Rs. 3/kg, wheat at Rs. 2/kg and coarse grain like bajra at Re 1/kg – and 5 kg free of cost under the PMGKAY. They will now get the 5 kg under the NFSA, and will not have to pay for it, but they will no longer get the additional 5 kg they were getting under the PMGKAY. Their foodgrain allocation is now halved from 10 kg to 5 kg.

As for the government, it saves the entire amount it was spending on foodgrains under the PMGKAY. What it will pay for is Rs 3/kg of rice, Rs 2/kg of wheat, and Re 1/kg of coarse grain. Even if we take the higher price tag of Rs 3 for 5 kg foodgrain to one person, it would be Rs 15 per person. At this rate, the cost to the government for 80 crore people comes to Rs 1200 crore.

As against this expense of Rs 1200 crore for free foodgrain under the NFSA, the government will save the entire amount it was spending under the PMGKAY. In a written reply to the Lok Sabha, Food and Consumer Affairs Minister Piyush Goyal said the government had spent a total Rs 3.91 lakh crore on foodgrain under the PMGKAY from the time it was introduced in March 2020. Year-wise, it was Rs 1,13,185 crore in 2020-21, Rs 1,47,212 crore in 2021-22, and Rs 1,30,600 crore in 2022-23, when it was discontinued after December.

While the Modi government gets credit for giving food free to the poor and needy, even as it reduces food allocation and saves money, it has also deprived some state governments of the political mileage they were getting. States like Odisha and Tamil Nadu were giving away foodgrain allocated to them under the NFSA free of cost. They only had to pay Rs 3/kg of rice, Rs 2/kg of wheat, and Re 1/kg of coarse grains. Now the food comes free from the Centre.

Another aspect to keep in mind is the fact that the population covered under the scheme does not cover all the poor since the quota of those covered has not been updated for over a decade while the population has increased and, according to some estimates, so has the number of those under the poverty line.

As for the allocation of 5 kg per person, that, too, is deemed inadequate by many. Even Modi, when he was chief minister of Gujarat, had criticised it vehemently. This is what he had to say then:

"I am also pained to note that the food security ordinance does not assure an individual of having two meals a day. I fail to understand how food security for the individual is being assured. The proposed entitlement of 5 kg per month per person implies a supply of only 165 gm per person per day. Persons involved in labour-intensive activities require about 2,500 calories per day, as per NIN 2009 recommendations. As 100 gm of food grain gives about 350 calories, 165 gm would provide only 500 calories per day, which is hardly 20 per cent of his daily calorie requirements…This does not address even the calorific security, not to talk about nutritional security, which is the main objective of food security. This, I am sure you will agree, is totally unacceptable if providing adequate food security is the objective of the ordinance."

But things have changed. The boot is on the other foot.

(Rajesh Sinha is a journalist)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.