Union Cabinet’s big decision under National Food Security Act

Union Cabinet’s big decision under National Food Security Act

The Union Cabinet has made a decision to approve the provision of free food-grain under National Food Security Act (NFSA) for a period of one year.

Commerce Minister Piyush Goyal briefed the media after the conclusion of the Cabinet meeting and informed that the entire cost of amounting to around Rs 2 lakh crore would be bear by Central Government.

Mass population advantage:

  • As per the information received by Central government the decision would benefit the 81.35 crore people who pay for subsidised food grain under the NFSA.
  • The Cabinet’s decision arrives days before the expiry of the PM Garib Kalyan Anna Yojana (PM-GKAY) free food grain scheme – which is set to end on December 31.
  • Central government has taken this bold decision against a report which cited not advisable to continue the PMGKAY beyond its present extension, both on grounds of food security and on fiscal grounds.

Pradhan Mantri Garib Kalyan Anna Yojana:

Launched: 2016

The free food grain scheme PM-GKAY was active much in the coronavirus pandemic to provide relief to the poor. It was extended multiple times even amid concerns about the mounting cost to the exchequer.

In July, the
finance ministry refused in Parliament that the Department of Expenditure had advised against the extension of the scheme beyond September due to fiscal concerns.

This followed reports that the expenditure department had said in an internal note   (external link) any further tax cuts or food subsidy extensions could have “adverse consequences for the fiscal math”.

Challenges:

As per the budget estimate for 2022-23, the Centre’s food subsidy bill was to be Rs 2.07 lakh crore.

The Rs 2 lakh crore that the Centre will now outlay on free food grain under the NFSA means the food subsidy will likely remain high, putting pressure on the government’s finances.

In the first seven months of the year, the government had already spent Rs 1.35 lakh crore on the same – or 65 percent of the full-year allocation.

Question & Answer:

Q1. Till which period of time the union cabinet has extended free food grain scheme under NFSA Act?

Ans. One year

Q2. What is the full form of PMGKAY?

Ans. Pradhan Mantri Garib Kalyan Ann Yoajana

Q3. How much crore rupees estimation for Budget 2022-23 of Centre’s food subsidy bill?

Ans. Rs.2.07 Lakh crore

 

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