Free ration distribution scheme reduced income inequality in many states, small farmers benefited

SBI Ecowrap Report: During the Kovid Pandemic in the country, the free distribution of food grains starting from April 2020 has led to a huge reduction in income inequality in backward states and lowest rung states. This claim has been made in a report by SBI Ecowrap. Know what is this report…

see what is report

This conclusion has come to the fore in a report by SBI Ecowrap. With this hypothesis, SBI started research on how the free food grain distribution scheme under the National Food Security Act (NFSA) has affected the distribution of funds to the poorest of the poor.

Inequality decreased in the country

During the Kovid epidemic in the country, there has been a vigorous distribution of free food grains. This has reduced the inequality in the country. It has been revealed in the report of SBI Ecowrap that due to the distribution of free ration, there has been a huge reduction in income inequality in many backward states of the country. Money has also reached the hands of small farmers. SBI conducted research on ‘How distribution of free food grains among the poorest of the poor is affecting the distribution of wealth’. In this, the issue of economic inequality and money reaching small farmers has come to the fore.

SBI report prepared from IMF data

The SBI study took cues from an International Monetary Fund (IMF) document that concluded how the Pradhan Mantri Garib Kalyan Yojana (PMGKAY) reduced extreme poverty in India to a minimum level of 0.8 per cent in the pandemic-hit year 2020. Played a role in keeping The SBI study analyzed the impact of rice procurement share on the Gini coefficient for 20 states. At the same time, the effect of wheat procurement share on Gini coefficient has been analyzed for 9 states.

reason for inequality

Be aware that rice is still the staple food for most of the people in India. It is being told that, “If the results are to be believed, the purchase of rice and wheat in different population groups with unequal distribution of wealth has a significant effect in reducing income inequality through a reduction in the Gini coefficient in relatively backward states.” . These states include Assam, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Uttar Pradesh, Uttarakhand and West Bengal.

Small farmers will get benefit

According to the report, the poorest of the poor are getting benefited through free grain distribution through higher procurement. Because of this purchase, money has also come in the hands of small farmers. It was told from the report that in the coming days, there can be a spurt in serial procurement by the government in many states.

Now free ration will be available till December 2023

The same central government had decided to provide free ration to 81.35 crore beneficiaries for a whole year i.e. from January to December 2023 under the National Food Security Act (NFSA). Under NFSA, till December 31, 2022, the government will give 5 kg of food grains per person every month free of cost at the rate of Rs 2 to 3 per kg. Now, due to the distribution of free grains under NFSA, grains will be available to the beneficiaries at zero cost through the Public Distribution System (PDS).

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