New Delhi: The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), a free ration scheme, is facing significant leakages resulting in an estimated annual loss of Rs 69,000 crore, a study by an economic policy think tank has revealed.
Gujarat, along with Arunachal Pradesh and Nagaland, tops the list of states with the highest leakage rates, the report says.
According to the study done by the Indian Council for Research on International Economic Relations (ICRIER), 28% of the 71 million tonnes of grain distributed under the scheme between August 2022 and July 2023 was lost to leakages. This translates to 17 million tonnes of rice and three million tonnes of wheat, valued at Rs 69,108 crore in 2022-23, Financial Express reported.
The study highlights varying leakage percentages across states, with some making notable progress in reducing such loss. Bihar and West Bengal, for instance, have reduced leakages from 68.7% and 69.4% in 2011-12 to 19.2% and 9% in 2022-23, respectively. Uttar Pradesh tops the list in terms of absolute quantity of grains leaked, with a leakage rate of 33%.
To address these issues, the study suggests targeting the bottom 15% of the population with free grains and offering grains at half the minimum support price (MSP) to the 15-57% income group.
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Implementing Direct Benefit Transfer (DBT) and end-to-end computerisation of the Public Distribution System (PDS) programme could improve efficiency and accountability, as per the study.
Furthermore, the report emphasises that relying solely on grain distribution may not address the diverse dietary needs of the population, particularly for high-value foods like fruits, vegetables and protein-rich items.
The government has extended PMGKAY until 2028, providing five kg of grains per month to 813 million people, with food subsidy expenses reaching Rs 2.72 lakh crore in FY23 and Rs 2.12 lakh crore in FY24 (revised estimate).
