PM Modi extends free-ration scheme for next 5 years: Who benefits from it?

“I have decided that the BJP government will extend the scheme of providing free ration to 80 crore poor people of the country for the next five years.”

On Saturday (4 November), Prime Minister Narendra Modi while campaigning for his party – the Bharatiya Janata Party (BJP) – in Durg, Chhattisgarh, days before the five-state Assembly elections, made the announcement to a thunderous applause.

He told the crowds, “For Modi, the poor are the biggest caste in the country and Modi is their ‘sevak’ (servant), brother and son. The BJP’s policy has resulted in the decline of poverty. In five years, 13.50 crore people have come out of poverty.”

देश में मेरा कोई भी परिवारजन भूखा न सोए, इसलिए 80 करोड़ गरीबों को मुफ्त राशन देने वाली योजना को भाजपा सरकार अब अगले पांच साल के लिए और बढ़ाएगी। pic.twitter.com/FAt9yhC85F

— Narendra Modi (@narendramodi) November 4, 2023

We take a closer look at what is the free-ration scheme and how it will benefit people.

What is the free-ration scheme?

The scheme, which provides free ration to people, is known as the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).

PMGKAY, as it is known, was launched in April 2020 when the country’s economic activities came to a halt owing to the COVID-19 pandemic. Under this scheme, beneficiaries were provided with five kilogramme of foodgrains along with the subsidised ration costing Rs 2-3 per kg that is provided under the National Food Security Act (NFSA).

It is given to the families that fall under the Public Distribution System (PDS). However, the amount of food grains provided could vary depending on the categories of beneficiaries.

First started in April, it was initially meant for three months – April, May and June 2020. However, in July of that year, it was extended for another five months – November 2020.

In April of 2021, the Modi-led government restarted the scheme as the country was hit by a devastating second wave of COVID, and this was approved until November.

However, on 24 November 2021, the government extended the programme for another phase, until the end of March 2022. Subsequently, the PMGKAY kept getting extensions – in December last year, the Centre announced a further one-year extension to the scheme. Now, the scheme will continue until December 2028.

Who benefits from the PMGKAY?

The PMGKAY is eligible for those falling under the Antyodaya Anna Yojana (AAY) and Priority Households (PHH). Even households headed by widows or terminally ill persons or disabled persons or persons aged 60 years or more with no assured means of subsistence or societal support are added to the scheme.

Moreover, all primitive tribal households, landless agricultural labourers, marginal farmers, rural artisans/craftsmen such as potters, tanners, slum dwellers, and persons earning their livelihood on a daily basis in the informal sector like porters, coolies, rickshaw pullers, hand cart pullers, and other similar categories in both rural and urban areas are also eligible for the scheme.

Families of HIV-positive people below the poverty line are also beneficiaries of the scheme.

According to the Centre, as of January 2023, there were 81.35 crore – equivalent to over two-thirds of India’s population – beneficiaries receiving foodgrains through the PMGKAY scheme.

How much has the PMGKAY scheme cost the Centre?

According to government data, until now, Rs 3.91 lakh crore has been spent on the PMGKAY scheme. Data has additionally revealed that the free-ration scheme will put a burden of Rs 13,900 crore on taxpayers and the total food security bill for this calendar year is estimated to be Rs 2 lakh crore.

A proper breakup reveals that the first phase of the PMGKAY scheme cost the government Rs 44,834 crore, while the last phase October-December 2022 cost Rs 44,673 crore.

An election boost?

Many believe that Modi’s decision to extend the free-ration scheme is with keeping an eye on the upcoming polls in the state of Chhattisgarh, Mizoram, Rajasthan, Madhya Pradesh and Telangana. As poll pundits note, it is sending a signal for the coming Lok Sabha elections, and also amplifies the BJP’s message of welfare politics.

In fact, the PMGKAY scheme has been credited with helping the BJP in past elections. In fact, the PMGKAY was credited with aiding the return of Yogi Adityanath to power in the 2022 Uttar Pradesh Assembly election. Similarly, the free-ration scheme helped the BJP’s chances in Uttarakhand.

Sonal Varma, an economist with Normura, a financial services group, noted in a research note: “Politically, this is a deft move. The withdrawal of the PMGKAY was always going to be politically tricky, but the simultaneous reorientation of the food public distribution system makes it an easier political sell.”

It’s important to note here that PM Modi has spoken out in the past against freebies, and termed it as 'revdi culture'.

The Congress, however, views Modi’s announcement of free grains as an admission of the “continuing high level of economic distress and growing inequalities.”

For almost a year now, the Prime Minister has been criticising what he derisively called 'revdis', which the Congress called it 'guarantees' to provide relief and assistance to crores of families suffering from the Modi Govt's insensitive and anti-people economic policies.…

— Jairam Ramesh (@Jairam_Ramesh) November 5, 2023

Congress’ Jairam Ramesh on X wrote, “The latest announcement is an indication of the continuing high level of economic distress and growing inequalities. For the vast majority of Indians, incomes have not grown in line with the sky-high prices of essential commodities.”

With inputs from agencies