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India Extends Garib Kalyan Anna Yojana For Three Months

The extension poses a fiscal challenge for the government already grappling with inflation and decline in grain reserves.

<div class="paragraphs"><p>(Photo: Unsplash)</p></div>
(Photo: Unsplash)

The union cabinet has decided to extend the government’s five-kg-a-month food relief scheme for three months up to December 2022.

This phase of the extension of the Pradhan Mantri Garib Kalyan Anna Yojana would require an estimated subsidy of Rs 44,762 crore, according to a PIB tweet. The overall expenditure of PMGKAY will be about Rs. 3.91 lakh crore for all the phases.

The total outgo of food grains is expected at 122 lakh metric tonnes. The PM-GKAY has been under implementation since April 2020 and the latest extension will ensure that the poor and vulnerable are supported for the forthcoming major festivals, a PIB release said.

The extension beyond September poses a fiscal challenge for the government already grappling with inflationary pressure and a fall in the nation’s grain reserves to the minimum required level.

Devendra Pant, chief economist at India Ratings, said expenditure on the scheme has shown a decline for the first four months of this fiscal at Rs 64,288 crore compared with Rs 92,204 crore in the corresponding period in the previous fiscal. The decline also shows a decreasing dependence on the scheme, he said.

The scheme is also unlikely to change the overall demand for food grains, according to Pant. Inflation trajectory, too, would likely depend on how much the government increases its procurement by, he said.

Among others, the cabinet has also approved the release of additional instalment of dearness allowance and dearness relief at 4% to central government employees and pensioners due from July. It, too, announced redevelopment of three major stations—New Delhi, Ahmedabad and the Chhatrapati Shivaji Terminus in Mumbai.