Pradhan Mantri Garib Kalyan Anna Yojana

Indian Economy glossary

Also called: PMGKAY, PM Garib Kalyan Anna Yojana · Topic: Agricultural Marketing, MSP, Buffer Stocks and PDS · NCERT: Beyond NCERT

Meaning

Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) is the Central scheme that gives the foodgrain entitlement under the National Food Security Act (NFSA) 2013 completely free to NFSA beneficiaries. Since 1 January 2023, NFSA grain has been merged into PMGKAY and costs nothing at the ration shop. The scheme has been extended to 2028.

It matters because it is now the main channel of India's food safety net. PMGKAY covers 67% of the population, counted on Census 2011 figures, which gives a ceiling of about 81.35 crore persons. Because the Central Issue Price is now zero, the government pays the whole cost of this grain.

Food subsidy formula (study note): Food subsidy = (Economic cost − Central issue price) × quantity issued + cost of carrying buffer stocks. Under PMGKAY, CIP = 0. So the subsidy = economic cost × quantity + buffer carrying cost.

Explanation

How it works

The entitlement comes from the NFSA. PMGKAY only removes the price.
NFSA 2013 decides who gets grain and how much.
PMGKAY decides that this grain is given free.
Who is covered (NFSA limits):
up to 75% of the rural and 50% of the urban population;
together this comes to 67% of the population on Census 2011, or about 81.35 crore persons.
How much each person gets:
Priority households: 5 kg per person per month.
Antyodaya Anna Yojana (AAY) households (the poorest of the poor; AAY began in 2000): 35 kg per household per month.
The delivery chain:
Farmers sell wheat and rice at MSP (minimum support price, the price at which the government promises to buy).
FCI (Food Corporation of India) and state agencies hold this grain in the central pool.
The grain goes to states, then to fair price shops (FPS, the ration shops; about 5.4 lakh).
The beneficiary collects it free after biometric (fingerprint) authentication on an ePoS machine.
The ration card is issued in the name of the eldest woman (18+) of the household.

Where it came from

It began as COVID-19 relief. During the pandemic, PMGKAY gave extra free grain to NFSA households on top of their normal quota.
From 1 January 2023 it changed form.
Before: NFSA grain was sold at a CIP (central issue price, the price at which the Centre gives central-pool grain to states) of ₹3/₹2/₹1 per kg for rice, wheat and coarse grains.
After: the CIP became zero and NFSA grain was merged into PMGKAY.
The scheme was then extended to 2028.

Worked example: what "free" means in rupees

Priority household of 4 persons, taking rice:
Entitlement = 4 × 5 kg = 20 kg a month.
Old cost at a CIP of ₹3/kg = 20 × ₹3 = ₹60 a month. Under PMGKAY it is ₹0.
AAY household, taking rice:
35 kg × ₹3 = ₹105 a month saved.
For the government, the bill goes up:
Earlier the subsidy per kg was (economic cost − ₹3).
Now it is the full economic cost (economic cost = MSP + procurement costs + storage, transport and interest costs).
Total food subsidy is about ₹2 lakh crore a year (verify current).

What makes coverage rise or fall

The Census 2011 freeze.
Coverage is fixed as a share of the 2011 population and has not been revised since 2013.
States had already identified 80.6 crore beneficiaries by August 2025.
So only about 0.75 crore places are left under the 81.35 crore ceiling.
What this means:
People born, married or newly made poor after 2011 can be left out, even if they are eligible.
In July 2022, the Supreme Court asked the government for a formula so that NFSA coverage is not tied to Census 2011.
Cleaning the list.
Duplicate or ineligible cards are deleted through Aadhaar seeding and data analytics ("Rightful Targeting").
This frees up places for genuine beneficiaries.

In India

Who runs it: the Department of Food & Public Distribution (DFPD), Ministry of Consumer Affairs, Food & Public Distribution, with State/UT governments.
Legal base: NFSA 2013. PMGKAY makes this legal entitlement free; it does not create a new right.
Grain supply: FCI (Food Corporations Act 1964; set up 1965) through centralised procurement, plus decentralised procurement (1997-98), where states buy and distribute grain themselves.
Delivery and technology (as of 2026):
ONORC (One Nation One Ration Card) covers 100% of PMGKAY beneficiaries across 36 States/UTs, so a migrant can draw free grain at any FPS in India.
98.8% of ration cards are Aadhaar-seeded.
99.8% of FPSs have ePoS machines.
e-KYC covers 71.52 crore beneficiaries (91%), as on 30 September 2026.
Last-mile funding: SARTHAK-PDS pays for movement within states, handling and FPS dealer margins until 31 March 2031.
Nutrition add-on: fortified rice (rice with added iron and vitamins) was made universal in the PDS by 2024.

Don't confuse with

NFSA 2013: the law that creates the entitlement (who gets grain and how much). PMGKAY is the scheme that makes that grain free. PMGKAY does not change the 5 kg / 35 kg quantities.
Antyodaya Anna Yojana (AAY, 2000): one category of beneficiaries inside NFSA (35 kg per household). PMGKAY covers both AAY and priority households.
One Nation One Ration Card (ONORC, 2019-22): changes where grain can be collected (portability). PMGKAY changes what it costs (zero). Neither adds new beneficiaries.
Open Market Sale Scheme (OMSS): sells surplus central-pool grain on the open market at fixed prices to cool prices (e.g. Bharat Atta, Bharat Rice 2023-24). PMGKAY grain is free and only for NFSA cardholders.

Prelims Hooks

Since 1 January 2023, NFSA grain has been free (CIP = ₹0), merged into PMGKAY, and extended to 2028.
Coverage ceiling: 67% of the population on Census 2011, about 81.35 crore persons. 80.6 crore were identified by August 2025.
Entitlements are unchanged: 5 kg per person per month (priority) and 35 kg per household per month (AAY).
Before PMGKAY, the CIP was ₹3/₹2/₹1 per kg for rice/wheat/coarse grains. Now the full economic cost is subsidy. Food subsidy = (economic cost − CIP) × quantity + buffer carrying cost.
Trap: "PMGKAY created a new legal entitlement to food" is FALSE. The right comes from NFSA 2013. PMGKAY only made it free.
ONORC covers 100% of PMGKAY beneficiaries in 36 States/UTs. The scheme is run by DFPD, not FCI. FCI only supplies the grain.

Mains Points

Free grain: fiscal cost vs food security.
For: free grain removes the price barrier for the poorest, protects migrants (through ONORC) and uses up central-pool stocks that are often far above buffer norms.
Against: with CIP at zero, the full economic cost (about ₹2 lakh crore a year in food subsidy) falls on the budget. Open-ended MSP procurement of rice and wheat also continues, which keeps Punjab and Haryana in the paddy-wheat cycle and adds to groundwater stress.
The Shanta Kumar HLC (2015) had instead suggested cutting NFSA coverage to about 40% and moving to cash transfers.
Exclusion is now the main problem, not price.
The Census 2011 freeze leaves almost no room under the 81.35 crore ceiling. The Supreme Court asked in July 2022 for a formula to fix this.
Biometric checks fail for elderly people and manual labourers, and poor network connectivity blocks sales. About 9% of beneficiaries still lack e-KYC.
Fix: revise coverage to current population, and give every FPS a fallback (OTP, iris or a recorded manual sale) when the fingerprint check fails.
From calorie security to nutrition security.
Free cereals give enough calories but do not solve hidden hunger (lack of iron, zinc, iodine or vitamin A even when calories are enough).
NFHS-5 (2019-21): anaemia in 57% of women aged 15-49, and 35.5% of children under 5 stunted. India ranked 105th of 127 on the Global Hunger Index 2024.
PMGKAY can be a platform for fortified rice (universal by 2024), biofortified crops and millets. This links GS-III food security to GS-II welfare delivery.

Agricultural Marketing, MSP, Buffer Stocks and PDS