Extending PMGKY is the right step | HT Editorial
It will prevent hunger, help the poor save, and aid economic recoveryUpdated: Jun 30, 2020 19:04 IST
In his address to the nation on Tuesday, Prime Minister Narendra Modi announced that the government is extending free ration to 800 millions Indians up to November under the Pradhan Mantri Gareeb Kalyan Yojana (PMGKY). In addition to 5kg of rice or wheat per family member, the beneficiaries will also get 1kg of gram, an important source of protein, per month. This decision deserves appreciation. As Covid-19 cases continue to surge, any immediate economic recovery, and therefore, restoration of incomes is unlikely. Ensuring food security for all has to be the first priority in such a situation.
While 60% of India’s population will benefit from the programme, it will also generate economic benefits beyond preventing hunger. It will make sure that poor workers do not see a collapse in their bargaining power. Savings on food spending — India’s poor spend more than half of their household budget on food — will also give a boost to non-food demand. This will be crucial for bringing the non-farm economy back on track. The State should remain vigilant that farm incomes do not suffer due to excess production leading to a collapse in prices of food items, which are not included in the free ration scheme. Given the weakness in aggregate demand, this cannot be ruled out. To be sure, today’s announcement also had politics in mind. The PM mentioned Chhath, the most important festival in Bihar, which is due for elections at the end of the year. While this has drawn criticism, and speculating on motives is always hazardous, in a democracy, there is nothing wrong in politics driving augmentation of welfare. The challenge now is implementation.