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Government to spend Rs 93,869 crore this year on free foodgrains scheme

New Delhi, June 28

The Centre will spend Rs 93,869 crore this year to provide 5 kg of foodgrains per month free of cost to over 80 crore people during May-November for providing relief to the poor amid the second wave of COVID-19, the finance minister said on Monday. 

Last year, the Centre had launched the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) to provide free foodgrains to over 80 crore beneficiaries covered under the National Food Security Act (NFSA), as part of its effort to reduce the hardships of people during the pandemic. 

The scheme was operational during April-November period of 2020. 

After the outbreak of the second wave in April 2021, the PMGKAY scheme was reintroduced, initially for May-June and then extended till November this year. 

Addressing a press conference to announce fresh stimulus measures for the economy, Finance Minister Nirmala Sitharaman said the estimated financial implication for providing free foodgrains is Rs 93,869 crore for this year. 


The Centre spent Rs 1,33,972 crore last fiscal on this scheme. 

The total financial implication is estimated at Rs 2,27,841 crore for PMGKAY, Sitharaman added. 

The scheme has been reintroduced to minimise the economic hardships being faced by the vulnerable PDS (Public Distribution System) beneficiaries during the second wave of the COVID-19 pandemic. 

Earlier this month, Prime Minister Narendra Modi while addressing the nation had announced that the Centre’s free food programme PMGKAY will be extended for five months till Diwali.

Five kgs of foodgrains per person per month is provided free of cost under the PMGKAY to 81.35 crore beneficiaries covered under the NFSA. 

This is over and above the distribution of 5 kg foodgrains per person every month at highly subsidised rates of Rs 1-3 per kg via ration shops to NFSA beneficiaries. 

Sitharaman also highlighted that wheat procurement has touched an all-time high of over 432 lakh tonnes in the rabi marketing season of 2021-22. Wheat farmers have been paid Rs 85,413 crore. 

The finance minister also announced that the government has provided an additional subsidy amount of Rs 14,775 crore for DAP and other complex fertilisers under the Nutrient Subsidy Scheme (NBS). 

The NBS subsidy has been raised to Rs 42,275 crore this fiscal from Rs 27,500 crore in the previous year. 

Minister of State for Finance Anurag Thakur said out of the total Rs 14,775 crore of additional subsidy, Rs 9,125 crore is towards DAP (Di-ammonium phosphate) and Rs 5,650 crore for NPK based complex fertilisers. 

Recently, the Union Cabinet approved hike in subsidies for DAP and complex fertilisers by Rs 14,775 crore to keep the price of crop nutrients for farmers low despite the rising costs. 

After urea, DAP is the most widely used fertiliser in the country. 

Last month, the Centre decided to increase subsidy on DAP fertiliser by 140 per cent. The decision was taken at a high-level meeting chaired by Prime Minister Narendra Modi.