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Pandemic is over, Economy has recovered, time to rationalise PMGKAY

TFI Desk by TFI Desk
21 September 2022
in Economy
Pradhan Mantri Garib Kalyan Anna Yojna
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Pradhan Mantri Garib Kalyan Anna Yojna (PMGKAY) is one of the world’s most successful welfare programs, especially in the depressing times of the pandemic. It provided additional ration benefits to around 80 crore people of the country who are covered under the National Food Security Act (NFSA).

It has been more than two and a half years since the scheme was introduced by the government in April 2020, at the onset of the pandemic.  As the virus started raising its head again around April 2021, the government reintroduced the scheme from April 2021 to June 2021. The second wave of the pandemic, which was even more devastating, forced the government to extend the scheme till November 2021 and further to March 2022. And the scheme was further extended till November 2022.

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Resurrected Economy

However, it has been around more than 6 months of the normalcy and the economy has bounced back with buoyancy like never before. India posted one of the highest quarterly economic growths in its history with 13.5% in the first quarter of FY 23 (April-June). Although given buoyant economic activity in every sector, from agriculture to manufacturing and services, the economists and statisticians were expecting an even higher growth rate.

Read more:- ‘Economically broken’ China is importing broken rice from India

In the last few months, India’s direct & indirect taxes are among the highest. Companies are hiring like never before and salaries are going up exponentially. India has emerged as the only bright spot amid global turmoil, and foreign as well as domestic investors are bullish on Indian economy.

So, it is the right time for the government to either rationalize Pradhan Mantri Garib Kalyan Anna Yojna (PMGKAY) or scrap it altogether. The sectors in which poor people are usually employed, like agriculture and construction, are growing at an unprecedented rate. Hence, almost everyone who is looking for a job has one.

Growth Registered in all Sectors

The agriculture sector, which has remained a bright spot for India since Covid -19 pandemic, has continued to perform excellently at around 4.5%. In the last fiscal year, India, for the first time in its history, exported agricultural goods worth more than 50 billion dollars given the rising demand for wheat and rice, and growth in their prices as well.

Construction grew at 16.8% given higher demand of housing as well as commercial real estate in the last few months. Home purchase is registering record growth, especially in metropolitan cities and even in villages, the construction of pucca (concrete) houses under the various government schemes has hit a new high. The growth in construction sector is significant because it generates a large number of jobs, especially for the people at the bottom of the pyramid.

Read more:-It won’t be an exaggeration to say that Piyush Goyal is the hero of India’s economic revival

Time to rethink about Pradhan Mantri Garib Kalyan Anna Yojna (PMGKAY)

Therefore, continuing with Pradhan Mantri Garib Kalyan Anna Yojna (PMGKAY) will only deplete India’s food reserves – maintaining which is crucial given global food shortage and poor crop production. The Secretary of the Food Ministry Sudhanshu Pandey informed about the ongoing consideration on PMGKAY. The program cost heavily to the Union government. The total expenditure under PMGKAY (from March 2020 to September 2022) has touched nearly 3.40 lakh crore rupees. Till the last extension, the government has allotted 1000 lakh tones of food grains under the Pradhan Mantri Garib Kalyan Anna Yojna (PMGKAY).

The government must consider rationalizing of ending Pradhan Mantri Garib Kalyan Anna Yojna (PMGKAY) to maintain healthy food reserves, cut on food subsidy, reduce food inflation and normalize the labor markets. The country has emerged stronger from the pandemic with government intervention and it is time to unleash the animal spirits of the market to get a near double digit growth for next few years.

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