Originally planned to run from June 2020 to March 2020 due to the Covid pandemic, the PMGKAY has undergone several extensions. The central government would give free food grains to about 813.5 million beneficiaries under PMGKAY for a five-year period beginning on January 1, 2024, at an estimated cost of Rs 11.80 lakh crore over five years, the Cabinet led by Prime Minister Narendra Modi decided in November of last year.
In accordance with the National Food Security Act of 2013 (NFSA), the programme is for holders of ration cards. The UPA administration, backed by Congress, established the NFSA to supply food grains at a reduced price. Now that PMGKAY is a five-year programme, the government has combined it with the NFSA.
In Budget 2023–24, the Food Corporation of India (FCI) received a food subsidy under the NFSA of almost Rs 1.97 lakh crore.
Let's now examine FM Nirmala Sitharaman's food subsidy or free foodgrain funding scheme.
The Mahatma Gandhi National Rural Employment Guarantee scheme (MGNREGA) is one example. The MGNREGA budget projection for 2024–2025 is Rs 86,000 crore, the same as for the previous fiscal year. Since the first Covid year, 2020–21, when it peaked at an all-time high of Rs 1.11 lakh crore, the budget for MGNREGA has continuously fallen. It dropped to Rs 98,468 crore in 2021–22, Rs 90,806 crore in 2022–23, and finally to Rs 86,000 crore in 2024–25, the second Covid year.
This suggests a switch from the rural employment guarantee system to free foodgrains as a safety net, as it shows savings of Rs 25,000 crore from MGNREGA.
Additionally, less money is being allocated for the urea and nutrient-based subsidies (NBS). With updated forecasts for 2023–24 at Rs 60,300 crore, the NBS allocation was cut in half, from Rs 86,122 crore in 2022–23 to a predicted Rs 45,000 crore in 2024–25. Comparably, the budgeted amount for the urea subsidy dropped from Rs 1.65 lakh crore in 2022–2023 to Rs 1.19 lakh crore in 2024–2025; the updated projections for 2023–2024 place the amount at Rs 1.28 lakh crore.
The payment to service providers for building and expanding telecom infrastructure has drastically decreased. The revised estimate figure plummeted to just Rs 2,000 crore. The actual spending was Rs 53,500 crore in 2022–2023; the budget for 2023–2024 was cut to Rs 10,400 crore. The estimated budget for 2024–2025 is still set at Rs 2,000 crore.
The government established a guaranteed emergency credit line programme for MSMEs in the wake of the Covid disaster. Since the financial burden on MSMEs has lessened, there is less funding allocated for this programme; actual spending for 2022–2023 was Rs 10,500 crore, while revised estimates for 2023–2024 were Rs 14,000 crore, as opposed to the Rs 14,100 crore budgeted. For 2024–2025, the allocation remains at Rs 10,163 crore.
Additionally, there have been no appreciable improvements in funding for roads or the National Highways Authority of India (NHAI).
Compared to a revised estimate of Rs 1.08 lakh crore in 2023–24 and actual spending of Rs 75,821 crore in 2022–23, the road works allocation for 2024–25 stays at Rs 1.09 lakh crore. In a same vein, the NHAI's budget for 2024–25 is kept at Rs 1.68 lakh crore, down from revised forecasts of Rs 1.67 lakh crore for 2023–24 and actual spending of Rs 1.41 lakh crore for 2022–23. The current budget has no significant expenditures for NHAI.
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