Union Cabinet green-lights additional allocation of foodgrain under PMGKY till November

The Union Cabinet has given its go-ahead to allocation of additional foodgrain under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) till November.

It also approved merger of Central Railside Warehouse Company (CRWC) with Central Warehousing Corporation (CWC) and the agreement between India and Saint Vincent and The Grenadines for exchange of information and assistance in collection of tax claims.

The sanction of the additional foodgrain free of cost to a maximum of 813.5 million individuals at 5 kg per person per month for five months would entail an estimated food subsidy of Rs 64,031 crore, an official statement said on Wednesday.


"Additional allocation will ameliorate hardships faced by the poor due to economic disruption caused by the coronavirus," said a statement issued after a meeting of the Cabinet chaired by Prime Minister Narendra Modi. An announcement to this effect was made by Modi in his address to the nation on June 7.

The Centre will bear an expenditure of Rs 67,266.44 crore, including Rs 64,031 crore as food subsidy, besides transportation, handling and Fair Price Shop dealers' margins - totalling to Rs 3,234.85 crore, the government said.

The Department of Food and Public Distribution will decide allocation of wheat or rice, and extension of lifting or distribution period as per operational requirements, arising out of adverse weather conditions or supply chain and Covid-induced constraints.

The Cabinet also approved the merger of CRWC with CWC, which will lead to unified warehousing, handling and transportation functions for both, besides promoting ease of doing business and bringing private sector efficiencies in public sector undertakings.

"It will result in efficiency, optimum capacity utilisation, transparency, inflow of capital into railside warehousing and employment generation," the ministry said.

All assets, liabilities, rights and obligations of CRWC - a mini-ratna category-II central public sector enterprise - will be merged and transferred to its holding enterprise and its sole shareholder, CWC.

The merger is expected to be completed within eight months of the date of decision and will facilitate setting up at least 50 more railside warehouses near goods shed locations.

The Cabinet also approved an agreement between India and Saint Vincent and The Grenadines, for Exchange of Information and Assistance in tax collection claims.

The new agreement contains provisions for tax examination abroad, which provide that a country may allow representatives of the other country to enter its territory, to the extent permitted under its laws, to interview individuals and examine records for tax purposes.

The agreement will facilitate exchange of information between the two countries including sharing of information held by the banks and other financial institutions encompassing the information regarding the legal and beneficial ownership.

It will also facilitate the assistance in collection of the tax claims between the two countries.