Free Ration To Poor For 5 Years, 16th Finance Panel's Terms Of Reference Get Cabinet Nod

The decision, which is set to take effect from January 1, 2024, will benefit 81.35 crore people, said Union minister Anurag Thakur at a press briefingWednesday.

Thakur said a Cabinet meeting chaired by Prime Minister Narendra Modi late Tuesday evening decided to extend PMGKAY. He said the extension of the scheme is set to cost the exchequer around Rs 11.80 lakh crore over five years.

The government said in a statement that providing free food grains – such as rice, wheat and coarse grains/millets – will strengthen food security and mitigate any financial hardship faced by the poor and vulnerable sections of the population.

PMGKAY was launched in April 2020 initially for just three months to provide relief to the poor during the Covid-19 pandemic. After multiple extensions, it was set to end on December 31 this year.

On Tuesday, the Cabinet took several other decisions. Thakur said it approved a scheme to provide drones to 15,000 women self-help groups, which will rent them to farmers for agriculture purposes. The total outlay for this scheme is set at Rs 1,261 crore for two years.

The Cabinet also approved the Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan (PM-JANMAN) for tribal welfare with a total outlay of Rs 24,104 crore.

Thakur said the Union Cabinet has approved the Terms of Reference (ToR) for the 16th Finance Commission. The commission’s recommendations will be implemented from April 1, 2026, for a period of five years.

Thakur said names of the chairperson and the members will be announced later.

According to the ToR, the commission will make recommendations on the distribution between the Union and the states of the net proceeds of taxes which are to be, or may be, divided between them.

It will also suggest the principles which should govern the grants-in-aid of the revenues of the states out of the Consolidated Fund and the sums to be paid to the states by way of grants-in-aid of their revenues under Article 275 for the purposes other than those specified in the provisos to clause (1) of that article.

The 15th Finance Commission was formed in November 2017 and it made recommendations covering a six-year period beginning April 1, 2020.