Estimated cost for distribution of food grains (Rice and Wheat) and pulses under Pradhan Mantri Garib Kalyan Ann Yojana during April - November 2020 is around Rs 1,48,938 crore

Prime Minister Shri Narendra Modi had announced the extension of Pradhan Mantri Garib Kalyan Ann Yojana till the end of November 2020. He said that the PMGKAY scheme is extended from July till the end of November 2020. During this five-month period, more than 80 crore people will be provided 5 kg free wheat/rice per month along with 1 kg free whole chana to each family per month.

The Department of Food and PD has worked out estimated cost under TPDS @ 5 Kg per person per month for three months i.e. April-June 2020 would entail an estimated subsidy of Rs 44,131 crore (US$ 6.26 billion) taking the estimated Economic Cost of Rs 37,267.60 (US$ 528.69)/MT for rice and Rs 26,838.40 (US$ 380.74)/MT for wheat (as per BE 2020-2021).

Further, while under NFSA, the expenditure towards intra state transportation and handling charges for movement from FCI depots to Fair Price Shops (FPSs) as also dealer's margin etc. is shared between Govt. of India and States/UTs as per the sharing pattern and norms for expenditure on this account as per rules framed under NFSA. As Govt. of India is bearing the entire expenditure towards this Scheme, an expenditure of Rs 1,930 crore (US$ 273.80 million) would be required to be met towards transportation and handling and FPS dealers' margins etc. by Government of India as per the existing norms in this regard under NFSA. ln view of the above, the total estimated expenditure to be borne by Government of India towards food grain subsidy and expenditure on account intra state transportation, dealer's margin including additional dealer's margin towards use of ePOS would be Rs 46,061 crore (US$ 6.53 billion).

On the basis of above, an estimated cost of 32 million tonne (12 Million Tonne for April-June 2020 and 20 LMT for July-November 2020) for distribution of food grains (Rice and Wheat) from April to November 2020 will be approx. Rs 1,22,829 crore (US$ 17.43 billion).

As per Department of Consumer Affairs note, the estimated expenditure towards distribution of pulses is Rs 5,000 crore (US$ 709.32 million) for the period April-June 2020. Accordingly, the estimated expenditure for distribution of pulses during the period April-November 2020 will be Rs 11,800 crore (US$ 1.67 billion) approx.

In addition to above, the estimated cost for distribution of food grains to migrant labours for the period of two months is Rs 3,109.52 crore (US$ 441.13 million). The foregone cost of Central Issue Price for food grains which comes to approximately Rs 1,400 crore (US$ 198.61 million) per month entails an expenditure of approximately Rs 11,200 crore (US$ 1.59 billion).

Thus, the estimated cost for distribution of food grains (Rice and Wheat) and pulses will be Rs 1,48,938 crore (US$ 21.13 billion) approx.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.