The government of the National Capital Territory of Delhi recently revealed data showing nearly nine per cent of beneficiaries under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) are ineligible. This finding marks broader concerns about the scheme’s implementation and financial sustainability across India.
Background of PMGKAY
PMGKAY was launched during the Covid-19 pandemic to provide free foodgrain to vulnerable households. It supplies 35 kg monthly to Antyodaya Anna Yojana (AAY) families and 5 kg per member to Priority Households (PHH). Initially a temporary relief, the scheme was extended until December 2028 with a projected cost of ₹11.8 trillion.
Eligibility Criteria and Violations
The scheme excludes government employees, households earning ₹1 lakh or more annually, four-wheeler owners, and income-tax payers. However, survey data from Delhi show 650,000 ineligible beneficiaries. Among them are car owners, those receiving benefits from other states, landowners, income-tax payers, and company directors. Nationally, about six per cent of ration card holders are also ineligible, including millions who pay income tax or own vehicles.
Challenges in Weeding Out Ineligible Beneficiaries
The Union government has asked states to verify and remove ineligible recipients by September 2025. Political risks and public backlash make this difficult. States bear the cost and political consequences of enforcement, leading to reluctance and delays. Additionally, recent tax rebates have removed many previous income-tax payers from the tax net, potentially making them eligible again.
Financial Implications
Removing ineligible beneficiaries would save around ₹14,000 crore annually. However, this is minor compared to the overall food subsidy bill of ₹2.36 trillion per year. The limited financial benefit reduces the incentive for strict enforcement.
Policy Options for Reform
Given the reduced poverty levels in India, policymakers could restrict PMGKAY to the poorest 25 per cent of beneficiaries, such as only AAY families. Alternatively, the scheme could reduce monthly foodgrain allocations or replace them with cash transfers equivalent to procurement costs. Such reforms would align the scheme with current poverty data and improve resource allocation.
Future Directions
A revamp of PMGKAY is anticipated among upcoming government reforms. Adjusting eligibility and benefit levels could make the scheme more pragmatic and fiscally sustainable. Savings could be redirected to social and economic infrastructure development to support long-term poverty alleviation.
Questions for UPSC:
- Discuss the challenges and implications of implementing large-scale welfare schemes like the Pradhan Mantri Garib Kalyan Anna Yojana in India.
- Critically examine the role of eligibility criteria in public distribution systems and its impact on social equity and resource management.
- Explain the concept of multidimensional poverty and discuss its relevance in designing targeted social welfare programmes in India.
- With suitable examples, discuss the political economy of subsidy reforms in India and the trade-offs between fiscal prudence and social welfare.
