BUDGET BRIEFS

Vol 14/Issue 4

Food Subsidy and the National Food Security Act

(NFSA) GoI, 2022-23
Food Subsidy is provided by the HIGHLIGHTS
Government of India (GoI) for
the supply and distribution of
foodgrains and other essential
commodities.
₹ 2,17,684 cr ₹ 2,06,831 cr
GoI allocations for Ministry of GoI allocations for Food Subsidy in
With the passing of the National Consumer Affairs, Food and Public FY 2022-23
Food Security Act (NFSA) in 2013, Distribution (MoCAF&PD) for FY
2022-23
nutritional security became a right.
Under the Act, adequate quantities
of quality food at affordable prices
SUMMARY & ANALYSIS
are to be provided to two-thirds of
India’s population.
■ For Financial Year (FY) 2022-23 Budget Estimates (BEs), GoI allocated `2,17,684
crore to MoCAF&PD. This was 28 per cent less from the previous year's Revised
Against the backdrop of the Estimates (REs) and 15 per cent less than the BEs.
COVID-19 pandemic, this brief uses
government data to analyse: ■ Food Subsidy is the largest scheme of the Ministry and followed a similar
■A
 llocations and releases under
pattern. Allocations for FY 2022-23 BEs stood at `2,06,831 crore, a 28 per cent
Food Subsidy; decrease from the previous year's REs.
■T
 rends in storage/stocking and

procurement of foodgrains; ■ This is despite the fact that allocations of foodgrains increased significantly
■T
 rends in foodgrain allocations,
in FY 2020-21 and FY 2021-22 owing to the additional allocations made
offtake, and distribution under under PMGKAY and other pandemic relief measures. With the extension of
NFSA and Pradhan Mantri Garib
PMGKAY into its fifth phase, estimated foodgrain allocations for FY 2021-22
Kalyan Anna Yojana (PMGKAY);
and
are at a record high of 981 lakh tons, 79 per cent higher than FY 2019-20.
■C
 overage under NFSA.
■ After accumulating a large debt over the years, FCI’s outstanding debt
reduced to `45,572 crore as on 31 December 2021, eightfold lower than the
Cost share and implementation:
Funds are borne by GoI, with
amount incurred on the same date in FY 2020-21. However, with the increase
state governments having the in foodgrains provided by FCI and lower allocations in FY 2022-23, the debt
option to choose between directly is likely to increase again.
undertaking procurement or
through centralised procurement
■ As of November 2021, the coverage of eligible beneficiaries under NFSA
via Food Corporation of India (FCI). (calculated using projected populations for 2021) was 87 per cent.

Accountability Initiative, Centre for Policy Research, Dharam Marg, Chanakyapuri, New Delhi - 110021
Prepared by: Jenny Susan John, [email protected] & Avani Kapur, [email protected]
■ The Public Distribution System (PDS) is Government of India’s (GoI’s) flagship programme aimed at ensuring food
security to Indian citizens through the supply and distribution of foodgrains and other essential commodities.
■ The implementation of the scheme is the joint responsibility of GoI and states. At the GoI level, the scheme is
implemented by the Department of Food and Public Distribution (DoFPD) and the Food Corporation of India (FCI).
■ In 2013, the enactment of the National Food Security Act (NFSA) made the provision of adequate quantities of
quality food at affordable prices and ensuring nutritional security as a right. The Act is meant to cover about two-
thirds of the population and is currently being implemented across all states and Union Territories (UTs). The Act
relies on the existing Targeted Public Distribution System (TPDS) mechanism to deliver these entitlements.
■ In light of the COVID-19 pandemic, on 26 March 2020, GoI announced the Pradhan Mantri Garib Kalyan Anna
Yojana (PMGKAY), providing additional foodgrains to eligible beneficiaries free of cost. Since then, five phases
of the scheme have been announced, with the latest PMGKAY-V being implemented for a period of four months
from December 2021 to March 2022.
■ This brief looks at the trends in Food Subsidy and implementation of the NFSA.

TRENDS IN GOI ALLOCATIONS AND RELEASES

■ For Financial Year (FY) 2022-23 Budget Estimates (BEs), GoI allocated `2,17,684 crore to the Ministry of Consumer
Affairs, Food and Public Distribution (MoCAF&PD), a 28 per cent decrease from the previous year’s Revised
Estimates (REs) and 15 per cent lower than the BEs.
■ This decrease comes after significant increases in allocations in FY 2020-21 and FY 2021-22, due to additional
foodgrains provided to families as part of the COVID-19 pandemic relief package.
■ Food Subsidy is the largest scheme of the Ministry. Under the programme, foodgrains are procured by the FCI and
states from farmers at government notified prices known as Minimum Support Price (MSP). These are then sold
at subsidised prices known as Central Issue Prices (CIPs). The difference between the total cost of procurement of
foodgrains (MSP and other incidentals) and CIP is provided by GoI as Food Subsidy to FCI. The subsidy also covers
the storage cost incurred by FCI in maintaining buffer stocks to ensure food security in the country.

BETWEEN 2021-22 RES AND 2022-23 BES, GOI ALLOCATIONS FOR

FOOD SUBSIDY DECREASED BY 28%

5,00,000 4,50,687
4,22,618
4,00,000
3,04,454
2,86,469
3,00,000 2,17,684
1,79,655 2,06,831
2,00,000 1,71,298
1,17,290
1,08,688
1,00,000
0
2018-19 2019-20 2020-21 2021-22 2022-23

GoI allocations to MoCAF&PD (in ₹ crore) Total Food Subsidy (in ₹ crore)

Source: Union Expenditure Budget, Volume 2, MoCAF&PD, FY 2018-19 to FY 2022-23. Available online at: https://www.indiabudget.gov.in. Last
accessed on 1 February 2022.
Note: Figures are in crores of Rupees and are Revised Estimates (REs), except for FY 2022-23 which are Budget Estimates (BEs).

2 ACCOUNTABILITY INITIATIVE, CENTRE FOR POLICY RESEARCH

■ At the start of FY 2020-21 BEs, GoI had allocated `1,15,570 crore for Food Subsidy. These were increased by more
than three times in the REs and stood at `4,22,618 crore. This increase was due to two reasons. First, as part of GoI’s
effort to provide free ration to citizens under the COVID-19 relief packages of PMGKAY and AtmaNirbhar Bharat
Package (ANBP). Second, was due to a one-time pre-payment of around `1.5 lakh crore of Food Subsidy to FCI for
an outstanding loan.
■ However, even with extension of the PMGKAY package till March 2022 and foodgrain allocations reaching a
record high of 981 lakh tons in FY 2021-22, REs for Food Subsidy were 32 per cent lower, compared to the previous
year. Allocations further decreased in FY 2022-23 BEs and stood at `2,06,831 crore, a 28 per cent decrease from FY
2021-22 REs.
Releases
■ Allocations for Food Subsidy are released by GoI to FCI. Release of funds by GoI has been falling since FY 2013-14,
resulting in large arrears and an increase in debt burden for FCI.
■ In FY 2013-14, FCI claimed a subsidy of `89,410 crore. Receipts from GoI, however, were `75,530 crore or 84 per cent
of the subsidy claimed. In FY 2019-20, while the subsidy claimed by FCI stood at `1,32,608 crore, FCI received only
`75,000 crore, or 57 per cent of the subsidy claimed.

■ Low releases by GoI had led to an increase in backlog payments and dues being carried over to the next financial
year. Consequently, FCI’s debt burden had increased from `84,446 crore in March 2014 to `3,27,865 crore as on
March 2020. This is more than a threefold increase.
■ The trend however changed in FY 2020-21 when, against a claim of `2,16,833 crore, GoI released `4,62,789 crore or
over twice the subsidy claimed during the year. This was due to a one-time pre-payment by GoI of around `1.5 lakh
crore for outstanding Food Subsidy related loans of the FCI. As a result, FCI’s outstanding debt fell significantly to
`60,209 crore for the year.

■ In FY 2021-22 REs, against the FCI claim of `2,17,460 so far, GoI released `1,46,600 crore or 67 per cent of the
subsidy claimed, till 31 December 2021. Consequently, the debt burden stood at `45,572 crore as on 31 December
2021. With the reduction in allocations for Food Subsidy, FCI's debt burden, however, is likely to rise again in FY
2022-23.

USING BUDGETARY PROVISIONS FROM GOI, FCI'S DEBT BURDEN

USING BUDGETARY PROVISIONS
DECREASED FROM GOI,IN
SIGNIFICANTLY FCI'S DEBT BURDEN SIGNIFICANTLY
2020-21
DECREASED IN FY 2020-21
3,27,865
3,50,000
3,00,000 2,53,162
2,50,000
1,89,864
2,00,000
1,26,097
1,50,000
84,446 91,353 89,978
1,00,000 60,209 45,572
50,000
0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

Cash Credit Limit (CCL) Bonds NSSF Loan Short Term Loan (STL) Total Borrowings

Source: (1) Borrowings from different sources by FCI for FY 2014-15 to FY 2021-22. Available online at: https://fci.gov.in/finances.php?view=113. Last
accessed on 14 December 2021. (2) Borrowings from different sources by FCI for FY 2013-14. Available online at: https://cag.gov.in/cag_old/sites/
default/files/audit_report_files/Chapter_2_-_Debt_Management_of_Report_No.18_of_2017_-_Compliance_audit_Union_Government_Food_
Corporation_of_India_Reports_of_Ministry_of_Consumer_Affairs%2C_Food_and_Public_Distribution_1.pdf. Last accessed on 31 December 2021.

BUDGET BRIEFS, FS-NFSA, GOI 2022-23, VOL 14/ISSUE 4 3

■ To meet its debt obligation, FCI borrows funds through Cash Credit Limit (CCL), Ways and Means Advances (WMA),
Short Term Loan (STL), National Small Saving Fund (NSSF) Loan, and bonds.
■ NSSF loans were sanctioned to FCI between FY 2016-17 to FY 2020-21, in lieu of Food Subsidy, as off-balance sheet
expenditure of the GoI, and were part of the reason for FCI’s rising debt. By March 2020, NSSF outstanding loans with
FCI stood at `2,54,600 crore, and for FY 2020-21 BEs, another `1,36,600 crore was to be financed through NSSF loans.
■ With a repayment of `3,39,236 crore during FY 2020-21, NSSF loans were fully repaid out of additional subsidy
provided by GoI.

STOCKING AND STORAGE OF FOODGRAINS

■ As per GoI guidelines, FCI is to maintain a certain amount of foodgrain stock in the Central Pool to meet operational
requirements of TPDS and other welfare schemes, plus food security stocks in case of any shortfall in procurement.
■ Over the years, the stock of foodgrains available in the Central Pool has been increasing and is significantly higher
than the stocking norms. In 2021, for instance, quarterly stocks available were more than twice the required
stocking norms, with the highest difference recorded on 1 April 2021. This was despite the additional allocations
and distribution of foodgrains as part of the relief measures to mitigate the impact of the COVID-19 pandemic.
■ As on 1 January 2022, the total stock of foodgrains stood at 554 lakh tons, 340 lakh tons more than the required
stock for the quarter and 24 lakh tons higher than the stock position last year for the same period.

IN 2021, TOTAL STOCK OF FOODGRAINS IN CENTRAL POOL WAS CONSISTENTLY

MORE THAN TWICE THE REQUIRED STOCKING NORMS

1,400

1,200

1,000
900
800
722
600
530 564
400 297 604
253 469
343 273
200 187 291 411
276 308
214 210 205
138 76 75 136 135 103
0
Wheat Rice Total Wheat Rice Total Wheat Rice Total Wheat Rice Total
Stock till 1 January Stock till 1 April Stock till 1 July Stock till 1 October

Stocking Norms (in lakh tons) Stock Position in the Central Pool in 2021 (in lakh tons)

Source: (1) Month-wise stock in Central Pool of rice, wheat and coarsegrains. Food Grain Bulletin, Department of Food and Public Distribution.
Available online at: https://dfpd.gov.in/food-grain-bulletin.htm. Last accessed on 13 December 2021. (2) Stocking Norms, Food Corporation of
India. Available online at: https://fci.gov.in/stocks.php?view=18. Last accessed on 13 December 2021.

4 ACCOUNTABILITY INITIATIVE, CENTRE FOR POLICY RESEARCH

PROCUREMENT
■ There are two main types of procurement of foodgrains: the Centralised Procurement System (CPS) and the
Decentralised Procurement System (DCP).
o CPS: Under the CPS, the FCI is responsible for procurement, storage, transportation, and bulk allocations of
foodgrains to the state governments. The operational responsibility, such as allocations within the state and
UTs, identification of eligible families, issuance of ration cards, and supervision of Fair Price Shops (FPS), rests
with individual state governments.
o DCP: Under the DCP, state governments undertake direct purchase of foodgrains and are also responsible for
the storage and distribution under NFSA and other welfare schemes. Excess stocks procured by the states are
returned to the FCI in the Central Pool, and the cost incurred on these excess stocks are reimbursed by FCI to
state governments, as per GoI costs sheets. GoI assumes the responsibility for the entire expenditure incurred
during the procurement operations, as per pre-approved costing.
■ At present, 17 states and UTs are procuring foodgrains under the DCP system. These are: Andaman and Nicobar
Islands, Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Jharkhand (6 districts), Karnataka, Kerala, Madhya
Pradesh, Maharashtra, Odisha, Punjab, Rajasthan (9 districts), Tamil Nadu, Telangana, Uttarakhand, and West
Bengal. The remaining states and UTs fall under the CPS.

PROVISIONS UNDER NFSA

■ NFSA legally entitles 75 per cent of the rural and 50 per cent of the urban population to receive subsidised
foodgrains under TPDS.
■ There are two categories of people receiving subsidised grains: a) Antyodaya Anna Yojana (AAY) which constitutes
poorest of the poor entitled to 35 kgs of foodgrains per family, per month, and b) Priority HouseHolds (PHH)
identified by states entitled to 5 kgs per person, per month.
■ Under NFSA, foodgrains are to be made available at a subsidised rate of `3 per kg for rice, `2 per kg for wheat, and
`1 per kg for coarse grains to all PHH and AAY households.

PRADHAN MANTRI GARIB KALYAN ANNA YOJANA (PMGKAY)

■ On 26 March 2020, due to the COVID-19 pandemic, GoI announced the Pradhan Mantri Garib Kalyan Anna Yojana
(PMGKAY), which provided 5 kgs of rice or wheat to eligible people, free of cost. This was in addition to the regular
quota of foodgrains.

■ After initially being implemented for a period of three months from April 2020 to June 2020 (PMGKAY-I), the
scheme was later extended till November 2020 (PMGKAY-II). In FY 2021-22, the scheme was restarted for a two-
month duration in May and June 2021 (PMGKAY-III) and then continued for a five-month period till November
2021 (PMGKAY-IV). A fifth phase of the scheme was announced for an additional four-month period, from
December 2021 to March 2022.

■ Additionally, special entitlements were also provided to migrant workers under ANBP. Under this scheme,
migrant workers were given free-of-cost foodgrains at 5 kgs per person, per month and whole chana at 1 kg per
household, per month for the months of May and June 2020.

BUDGET BRIEFS, FS-NFSA, GOI 2022-23, VOL 14/ISSUE 4 5

Allocations and Offtake of Foodgrains

■ On average, the total foodgrain allocations for NFSA has been 551 lakh tons between FY 2017-18 and FY 2020-21.
Allocations, however, increased significantly in FY 2020-21, with an additional 339 lakh tons allocated as part of
the pandemic relief measures. For FY 2021-22, 405 lakh tons of foodgrains were allocated to NFSA and 326 lakh
tons for PMGKAY, making a total of 731 lakh tons of foodgrains allocated till December, with three more months
left for the end of the financial year.

■ Not all allocations, however, are lifted. Since FY 2017-18, percentage of foodgrain lifted has consistently been
above 90 per cent, but has marginally decreased across years. In FY 2020-21, while total quantum offtake of
foodgrains increased significantly, it still remained below the allocations, at 94 per cent. Similarly, for FY 2021-22
till December, 668 lakh ton of foodgrains had been lifted, or 91 per cent of the total allocations.

TOTAL FOODGRAIN ALLOCATIONS (NFSA + COVID RELIEF) WERE 61% HIGHER IN 2020-21 THAN
THE PREVIOUS YEAR

98 95 96 94
1,000 91 100%

800 80%
339
315
600 60%
326
308
400 40%

553 540 553 524 549 528 548 518

200 405 360 20%

0 0%
Allocations O��take Allocations O��take Allocations O��take Allocations O��take Allocations O��take
2017-18 2018-19 2019-20 2020-21 2021-22
(till December)

NFSA (in lakh tons) COVID and non-NFSA (in lakh tons) Percentage of o��take out of allocations

Source: Allocations and offtake of foodgrains. Food Grain Bulletin, Department of Food and Public Distribution. Available online at: https://
dfpd.gov.in/food-grain-bulletin.htm. Last accessed on 13 January 2022.

■ Looking at phase-wise trends specifically for PMGKAY, there are some differences in foodgrains lifted out
of allocations. During the peak of the first and second COVID-19 waves, 98 per cent of total grain allocated in
PMGKAY-I (April-June 2020) and PMGKAY III (May-June 2021) were lifted. On the other hand, in Phase II (July
to November 2020) and Phase IV (July to November 2021) offtake was lower at 94 per cent and 87 per cent,
respectively.

■ Offtake for ANBP was the lowest, with only 80 per cent of foodgrains lifted from total allocations.

■ In terms of quantum of grains, for PMGKAY-III and IV, the total per month allocations was 39.8 lakh tons,
marginally lower than the per month allocations of 40.1 lakh tons for the previous two phases of the scheme.

6 ACCOUNTABILITY INITIATIVE, CENTRE FOR POLICY RESEARCH

 

PERCENTAGE OF FOODGRAINS LIFTED OUT OF TOTAL ALLOCATIONS WERE LOWER FOR

PMGKAY-IV COMPARED TO PREVIOUS PHASES
 98 98
94
250 87 100%
80
200 80%
200 199
150 188 60%
172
100 120 117 40%

50 80 78 20%
8 6
0 0%
PMGKAY-I ANBP PMGKAY-II PMGKAY-III PMGKAY-IV
(April-June 2020) (May-June 2020) (July-Nov 2020) (May-June 2021) (July-Nov 2021)
Allocations (in lakh tons) Offtake (in lakh tons) Percentage of foodgrains lifted out of total allocations

Source: (1) Allocations and lifting of foodgrains under PMGKAY. PIB dated 21 September 2021. Available online at: https://pib.gov.in/
PressReleaseIframePage.aspx?PRID=1756998. (2) Allocations and lifting of foodgrains under ANBP. Rajya Sabha Question AS 209. Available online
at: https://pqars.nic.in/annex/254/AS209.pdf. (3) Lifting of foodgrains under PMGKAY-IV. Food Grain Bulletin, Department of Food and Public
Distribution. Available online at: https://dfpd.gov.in/writereaddata/Portal/Magazine/FoodgrainBulletinforNovember2021.pdf. Last accessed on 13
December 2021.

■ While there were differences across states in the total quantum of foodgrains lifted, most states and UTs
witnessed a significant increase in offtake in FY 2020-21. Seventeen states saw an increase of more than 50 per
cent in foodgrains lifted compared to FY 2019-20.

■ In FY 2020-21, Uttar Pradesh saw the highest increase of 5,836 thousand tons foodgrains (65 per cent), followed by
Bihar and Maharashtra at 3,023 thousand tons (56 per cent) and 2,635 thousand tons (65 per cent), respectively.

■ In FY 2021-22, till December, most states had lifted more foodgrains than in previous years from FY 2017-18 to FY
2019-20, with Uttarakhand and Andhra Pradesh already having lifted a higher amount than their offtake in FY
2020-21.

■ The states with the highest offtake in FY 2021-22 (till December) were Uttar Pradesh (11,378 thousand tons), Bihar
(7,023 thousand tons), and West Bengal (5,247 thousand tons).

FOR MAHARASTRA AND UTTAR PRADESH, OFFTAKE OF FOODGRAIN IN 2020-21

INCREASED BY 65% COMPARED TO 2019-20
14,795

16,000
14,000
11,378

12,000
9,052
8,959
8,427

10,000
7,023
6,664
6,380

8,000
5,404
5,189
5,247
5,170

4,747
4,639

4,048
3,897

4,029
4,023

6,000
3,842

3,919
3,419
3,432

3,394
3,330

3,362
3,331
3,035

2,610

2,444
2,843
2,745
2,046
2,547

2,631
2,307

2,334
2,047

4,000
1,691

1,925
1,702
503
744
754

2,000
500

Offtake in 2018-19 (in thousand tons) Offtake in 2019-20 (in thousand tons)
Offtake in 2020-21 (in thousand tons) Offtake in 2021-22 till December (in thousand tons)

Source: Offtake of foodgrains. Food Grain Bulletin, Department of Food and Public Distribution. Available online at: https://dfpd.gov.in/food-
grain-bulletin.htm. Last accessed on 13 January 2022.

BUDGET BRIEFS, FS-NFSA, GOI 2022-23, VOL 14/ISSUE 4 7

COVERAGE AND BENEFICIARY ELIGIBILITY
■ State-wise rural and urban coverage under NFSA was determined by the erstwhile Planning Commission using
the National Sample Survey (NSS) Household Consumption Survey data for 2011-12 and based on Census 2011
population estimates. While GoI determines the total state-wise number of people to be covered under the
scheme, states are responsible for identification of eligible households. As per Section 10 of the NFSA Act, states
identify AAY households based on scheme guidelines, while the remaining households are covered as PHH in
accordance with state-specific guidelines.

■ Two-thirds or 67 per cent of India’s population are legally mandated to be covered under NFSA. Using India’s
current projected population of 136.1 crore for 2021, NFSA would need to cover 91.5 crore people.

■ Since 2016, after all the states and UTs were included in NFSA, the gap in percentage of eligible beneficiaries
covered and actual beneficiaries covered has been increasing. For 2021, as of November 2021, 79.5 crore
beneficiaries were covered under NFSA. This accounts for 98 per cent of eligible households as per Census 2011.
However, considering population growth and projected population, coverage falls to 87 per cent of the eligible
population, lower than the 92 per cent coverage in 2016. Therefore, approximately 12 crore beneficiaries are
excluded under the current coverage.

OVER 11 CRORE ELIGIBLE BENEFICIARIES LEFT OUT OF NFSA IN 2020 AND 2021

98 99 98 98 98 98
100% 50
76
80% 92 92 90 89 40
88 87
69
60% 30
24.62
40% 20
9.93 11.11 11.97
9.22
20% 6.73 6.95 10

0% 0
2015 2016 2017 2018 2019 2020 2021

Number of eligible beneficiaries not covered (in crore)

Percentage of beneficiaries covered (according to Census 2011)
Percentage of beneficiaries covered (after accounting for annual population growth)

Source: (1) Persons/families covered under National Food Security Act, 2013 as on 30 November 2021. Food Grain Bulletin, Department of Food
and Public Distribution. Available online at: https://dfpd.gov.in/food-grain-bulletin.htm. Last accessed on 13 December 2021. (2) Projected
Population 2021 as per Ministry of Health and Family Welfare (MoHFW). Available online at: https://nhm.gov.in/New_Updates_2018/Report_
Population_Projection_2019.pdf. Last accessed on 13 December 2021.

■ There were variations across states. Manipur and Himachal Pradesh had the lowest coverage at 72 per cent,
followed by Madhya Pradesh (76 per cent) and Gujarat (77 per cent). Similarly, states such as Uttar Pradesh and
Bihar, which have a large population living below the poverty line, had coverage lower than India’s average.

■ In contrast, 12 states and UTs had over 90 per cent coverage, with Odisha having the highest proportion at 95 per cent.

8 ACCOUNTABILITY INITIATIVE, CENTRE FOR POLICY RESEARCH

 87% OF ELIGIBLE BENEFICIARIES UNDER NFSA COVERED TILL NOVEMBER 2021

100% 95 94 93 91 90 89 87 86 86 85 84 84 84
80% 77 76 72
72
60%

40%

20%

0%

State-wise coverage under NFSA (till November 2021) All-India coverage under NFSA (87%)

Source: (1) State-wise number of persons/families covered under National Food Security Act, 2013 as on 30 November 2021, Food Grain Bulletin.
Department of Food and Public Distribution. Available online at: https://dfpd.gov.in/food-grain-bulletin.htm. Last accessed on 13 December 2021.
(2) Projected Population 2021 as per Ministry of Health and Family Welfare (MoHFW). Available online at: https://nhm.gov.in/New_
Updates_2018/Report_Population_Projection_2019.pdf. Last accessed on 13 December 2021.

■ Coverage for the two types of beneficiaries (AAY households and PHH) under NFSA also differed among states.
Himachal Pradesh had the highest percentage of AAY households in the total beneficiaries covered under NFSA

at 27 per cent, followed by Tripura and Tamil Nadu. Punjab and Rajasthan had the lowest proportion among all
states, at 5 per cent.

RAJASTHAN AND PUNJAB HAD THE LOWEST PROPORTION OF AAY HOUSEHOLDS IN TOTAL
BENEFICIARIES COVERED UNDER NFSA IN 2021-22

100%

80%
73

60%
80

81

83

85

86

86

87

88

88

89

90

91

91

95

95

40%

20%
27

20

19

17

15

14

14

13

12

12

10
11

0%
5

Proportion of AAY Households in total beneficiaries under NFSA Proportion of PHH in total beneficiaries under NFSA

Source: State-wise number of persons/families covered under NFSA. Food Grain Bulletin, Department of Food and Public Distribution. Available
online at: https://dfpd.gov.in/food-grain-bulletin.htm. Last accessed on 13 December 2021.

BUDGET BRIEFS, FS-NFSA, GOI 2022-23, VOL 14/ISSUE 4 9

DISTRIBUTION
■ Distribution of foodgrains to eligible people is done through a network of Fair Price Shops (FPS), which are
licensed to distribute foodgrains and essential commodities to all ration card holders under the TPDS.

■ There were state-wise variations in offtake and distribution of foodgrains under PMGKAY-III and IV. Both offtake
and distribution for states like Uttar Pradesh, Himachal Pradesh, and Odisha were above 95 per cent. On the other
hand, Sikkim lifted 93 per cent of the allocated foodgrains but distributed only 30 per cent of it. Similarly, the
percentage of foodgrains distributed out of offtake was lower in Uttarakhand (49 per cent) and Nagaland (69 per
cent), despite both states lifting 100 per cent or more of the allocated foodgrains.

16 STATES AND UTS DISTRIBUTED 100% OR MORE OF THE TOTAL LIFTED FOODGRAINS

160%
140% 134 128
120 114
120% 112 112 112
106 104 104 100 101
94 93 98 98 99 96 10095 98 93
100% 85 89
78 83 83
75 76
80% 70 69
60% 49
40% 30
20%
0
0%

Percentage of foodgrains offtake out of total allocations under PMGKAY-III and IV

Percentage of foodgrains distributed out of total offtake under PMGKAY-III and IV

Source: (1) Allocations and lifting of foodgrains under PMGKAY-III and IV. Food Grain Bulletin, Department of Food and Public Distribution.
Available online at: https://dfpd.gov.in/writereaddata/Portal/Magazine/FoodgrainBulletinforNovember2021.pdf. Last accessed on 13 December
2021. (2) Distribution of foodgrains under PMGKAY-III and IV. Annavitran Reports. Available online at: https://annavitran.nic.in/avPMGKY. Last
accessed on 13 December 2021.

■ As on 23 July 2021, nearly 4.98 lakh or 93 per cent FPS in the country had an Electronic Point of Sale (e-PoS) device,
and Aadhaar seeding of ration cards had been completed for around 21.91 crore ration cards (93 per cent). Aadhaar
seeding of NFSA beneficiaries, however, was lower at 70.94 crore (90 per cent).

ONE NATION, ONE RATION CARD

■ The ‘One Nation, One Ration Card’ (ONORC) scheme was launched in August 2019, to allow for nationwide
portability of NFSA benefits. The scheme provides flexibility to migrant beneficiaries to lift their foodgrains
from any FPS of their choice in most parts of the country, by using their existing ration card with biometric
authentication of identity on an e-PoS device.

■ For beneficiaries to avail the facility, a copy of either their ration card or seeded Aadhaar card is required.

10 ACCOUNTABILITY INITIATIVE, CENTRE FOR POLICY RESEARCH

■ As of January 2022, ONORC was being implemented in 34 states and UTs and covered nearly 75 crore beneficiaries
or 94 per cent of NFSA population in 2021-22.

■ During the period between 1 April 2020 and 30 September 2021, about 24.32 crore portability transactions under
NFSA were carried out across states and UTs.

ALL-INDIA PERCENTAGE OF AADHAAR SEEDING WITH RATION CARDS STOOD AT 93% WHILE
AADHAAR SEEDING WITH BENEFICIARIES WAS LOWER AT 90% AS OF JULY 2021

100100 100 100 100 100100 100 98 100 100 100 99 99 99 97

100% 98 95 93
89 85
80 80
80% 75
60
60%
43
40%
18
20%
6
0%

Percentage of Aadhaar seeding with ration cards Percentage of Aadhaar seeding with beneficiaries

Source: State-wise percentage of Aadhaar seeding with ration cards and beneficiaries. Rajya Sabha Question AU 1356. Available online at:
https://pqars.nic.in/annex/254/AU1356.pdf. Last accessed on 13 December 2021.

BUDGET BRIEFS, FS-NFSA, GOI 2022-23, VOL 14/ISSUE 4 11