Free food grains: Kanya's cadet burden will be a huge burden on the government exchequer

- Difficulty in maintaining the food subsidy bill as estimated in the face of rising prices

MUMBAI: Ahead of the Lok Sabha elections, the Union Cabinet's decision to extend the Pradhan Mantri Garib Kalyan Anna Yojana, under which 80 crore people in the country are getting the benefit of free food grains for another five years, is estimated to put an additional burden of Rs 2.40 lakh crore on the government's exchequer annually. . However, it becomes difficult to maintain the subsidy bill as per the budget estimate in case of rising price of foodgrains.

Due to this decision, which will be implemented from the new year, the government will have to spend 11.80 trillion rupees in the next five years. But the possibility of this increase is not ruled out. After extending the scheme several times during the Corona period, it was supposed to expire at the end of the current calendar year.

In the current financial year, a total expenditure of Rs 1.97 trillion has been estimated for this scheme, out of which Rs 95,000 crore has been spent in the first six months of the financial year, government sources said.

For the success of the scheme, the government has to address issues like storage, transportation and distribution of food grains. Apart from this, procurement of food grains at subsidized prices is also becoming a challenge for the government.

Sources also said that farmers prefer to sell goods in the open market rather than the government when foodgrain prices go above the support price during weak monsoon conditions.

High prices make it difficult for the government to keep the food subsidy bill within budget estimates.

Fertilizer subsidy is a major concern for the government in the current financial year. The non-urea fertilizer subsidy has increased over the budget estimate due to rising global prices. Increase in the price of fertilizers ultimately increases the cost of agricultural production.