Introduction
In 2016, the Govt. of India launched Pradhan Mantri Garib Kalyan Yojana as a part of the Taxation Laws Act 2016 (second amendment). The initial objective of the PM Garib Kalyan Yojana scheme was to ensure tax evaders declare unaccounted money and avoid penalty and criminal prosecution. Through this scheme, the govt. intended to use the deposited black money for the welfare of the poor people. The scheme was valid from December 2016 to March 2017.
In 2020, the govt. extended the scheme to include relief packages during the pandemic. The aim was to support the livelihood of poor during COVID-related lockdowns.
In the Union Budget 2025-26, an allocation of Rs. 2,03,000 crore (US$ 23.77 billion) was made for the Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY).
Objective of the Pradhan Mantri Garib Kalyan Yojana (PMGKY)
The PMGKY was initially launched to bring back black money from tax evaders by offering them protection from government prosecution. Under the PM Garib Kalyan Yojana, the govt. opened a window for tax evaders to disclose unaccounted income with a 49.9% tax rate. The plan was to use the deposited amount for eliminating income inequality in the country.
With the scheme extension in 2020, the govt. announced relief packages during the COVID-19 pandemic. The objective of the extension was to prevent employment disruption of low wage employees and support small establishments (with up to 100 employees). Under the extension, the central govt. provided entire employee EPF contributions (12% of the total wages) and employers’ EPF & EPS contributions (12% of wages), totalling 24% of the monthly wages for three months. Along with this, the govt. also announced relief packages to support the poor through various schemes. A relief package worth Rs. 1.70 lakh crore (US$ 23.22 billion) was announced by the Union Finance & Corporate Affairs Minister Ms. Nirmala Sitharaman under the PMGKY.
The scheme was initially planned for three months, but it was extended until November 2020.
Policy Details
The Pradhan Mantri Garib Kalyan Yojana 2020 aims to provide relief to different sections of the society such as migrant workers, farmers, urban & rural poor, and women. The govt. identified sections that were hit the hardest amid COVID-induced economic disruptions. To focus on each section, the govt. launched several schemes under the PMGKY. The following three schemes are noteworthy:
- PM Garib Kalyan Anna Yojana – Provision of food grains to the poor (rural & urban) through the PDS
- Cash Transfer Scheme – Rs. 500 (~US$ 6) each to women who have Jan Dhan account
- Insurance Scheme – Medical insurance to health workers including doctors, nurses, Asha workers, paramedics, and sanitation workers.
Components of PMGKY
The following are components of the PM Garib Kalyan Yojana package:
- PM Garib Kalyan Anna Yojana
This is the worlds’ largest food security scheme launched by the Government of India to combat COVID-induced economic disruptions. The scheme aims to ensure food safety (of the poor) by providing food items including 5 kg rice/wheat per individual and 1 kg per family every month for free.
All beneficiaries of the targeted public distribution system (TPDS) for Antyodaya Anna Yojana (AAY) and priority household (PHH) ration cardholders are eligible for food grains under this scheme. Key features of the scheme include the following:
- 80 crore individuals, i.e., approximately 66% of India's population was covered under this scheme
- Each one of them received double of their current entitlement. This additionality was free of cost.
- To ensure the availability of protein, families were provided 1 kg of pulses (as per regional preferences)
The Central Government decided to continue providing free food grains to 81.35 crore beneficiaries, including Antyodaya Anna Yojana (AAY) households and Priority Households (PHH) beneficiaries, for five years starting from January 1, 2024. AAY households will receive 35 kg of food grains per month, while PHH beneficiaries will receive 5 kg per person per month. The annual food subsidy borne by the government for this initiative amounts to Rs. 2.13 lakh crore (~US$ 25.7 billion), totalling approximately Rs. 11.80 lakh crore (~US$ 142.2 billion) over the next five years.
- Insurance Scheme for Health Workers Fighting COVID-19
Under this scheme, the govt. has insured health professionals treating COVID-19 patients. In case of accidental death of these healthcare professionals, the family would be compensated with an amount of Rs. 50 lakh (~US$ 60,000). Accidental death includes death due to COVID or accident while engaging with COVID-related duty. The premium of this scheme is being borne by the Ministry of Health and Family Welfare.
Public healthcare providers including community health workers, private hospital staff and retired /volunteers/local urban bodies/contracted/daily wage/ad-hoc/outsourced staff requisitioned by the states/central hospitals/autonomous hospitals of the Central/States/UTs, AIIMS and INIs/hospital of the Central Ministries are included in this scheme.
Apart from these healthcare professionals, employees such as ’safai karamcharis,’ ward boys, nurses, ASHA workers, paramedics, technicians, doctors & specialists, and other health workers were also covered.
The scheme covered ~22 lakh health workers fighting the pandemic.
Other prominent schemes launched or accelerated through PMGKY includes the following:
- Advance Payments to Farmers under PM KISAN
To support farmers during COVID, the govt. advanced the first instalment of PM Kisan Yojana. The instalment of Rs. 2,000 (~US$ 24) was due in FY21 but was frontloaded and paid in April 2020. This covered about 8.7 crore farmers. More than 11 crore eligible farmer families have benefitted from PM KISAN with Rs. 3.24 lakh crores (~US$ 38.71 billion) disbursed till July 2024.
- Support to Low-wage Earners in Organised Sectors
To support small businesses, the govt. proposed to pay 24% of employees’ monthly wages into their PF accounts.
Wage earners (earning below Rs. 15,000 [~US$ 180] per month) in a business with <100 workers were eligible for this scheme.
- Free Gas Cylinders to Poor Families
For three months starting April 2020, the government provided free liquefied petroleum gas (LPG) cylinders to over eight crore Prime Minister Ujjwala Yojana (PMUY) beneficiaries.
- MNREGA Worker Support
The govt. increased MNREGA wages by Rs. 20 (~24 cents) with effect from April 1, 2020. The step was to provide an additional per capita benefit of Rs. 2,000 (~US$ 24) to workers. Approximately 13.62 crore families benefitted from this scheme.
- Support to Senior Citizens
To support the senior citizens and people with disabilities, the govt. transferred Rs. 1,000 (~US$ 12) for three months to 3 crore aged widows and people in the Divyang (handicapped) category.
- Other Measures
The Govt. of India also amended the EPF regulations to include pandemic as the reason to allow non-refundable advance of 75% of the EPF amount or three months’ wages (whichever is lower).
It also allowed a welfare fund for building and other construction workers to aid and support workers during COVID disruptions. The fund supported about 3.5 crore registered workers.
Scheme Outcome
Under the PM Garib Kalyan Package, over Rs. 68,820 crore (~US$ 9.4 billion) were provided through cash or aid to 42 crore poor people across the country.
Rs. 30,952 crore (~US$ 4.23 billion) were transferred to women account holders of the PMJDY; Rs. 2,814.5 (~US$ 384.5 million) crore were transferred to 2.81 crore elderly people, widows, and people with disability; Rs. 17,891 crore (~US$ 2.44 billion) were paid to farmers as an advance instalment under the PM Kisan Yojana; and Rs. 4,987 crore (~US$ 681.3 million) were distributed to support 1.82 crore construction and building workers.
Apart from this, Rs. 2,476 crore (~US$ 338.25 million) were contributed to the EPF account of 0.43 crore employees and Rs. 9,700 crore (~US$ 1.33 billion) were transferred to beneficiaries of the PM Ujjwala Yojana.
Conclusion
The PMGKY is making fast leaps to achieve its objective of removing poverty from the country. The scheme has not only witnessed the return of black money from tax evaders but has also helped the government tackle challenges of pandemic-related economic disruptions. PMGKY has outlined a blueprint for supporting poor people during COVID and helped the country prevent further deterioration of the rich and poor income divide.
Through several schemes and packages under the PMGKY, the government has helped poor citizens continue their daily lives despite their inability to work. Over the years, PMGKAY has distributed approximately 1,118 lakh metric tons of food grains, benefiting millions across the country. The scheme has been instrumental in mitigating hunger and ensuring nutritional support to the underprivileged during unprecedented times.
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