Pradhan Mantri Garib Kalyan Yojana

Introduction

In 2016, the Govt. of India launched Pradhan Mantri Garib Kalyan Yojana as a part of the Taxation Laws Act 2016 (second amendment). The initial objective of the PM Garib Kalyan Yojana scheme was to ensure tax evaders declare unaccounted money and avoid penalty and criminal prosecution. Through this scheme, the govt. intended to use the deposited black money for the welfare of the poor people. The scheme was valid from December 2016 to March 2017.

In 2020, the govt. extended the scheme to include relief packages during the pandemic. The aim was to support the livelihood of poor during COVID-related lockdowns. As part of the Union Budget 2024-25, it was announced that Rs. 2,05,250 crore (US$ 24.58 billion) has been allocated to the Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY).

Objective of the PMGKY

The PMGKY was initially started to bring back black money from tax evaders by giving them protection from government punishment. Under the PM Garib Kalyan Yojana, the government gave a chance to tax evaders to declare their unaccounted income by paying 49.9% tax on it. The idea was to use this money to reduce income inequality in the country.

In 2020, during the COVID-19 pandemic, the government extended the PM Garib Kalyan Yojana (PMGKY) and announced several relief measures to help the people affected by the crisis. The main goal of this extension was to protect jobs of low-wage workers and support small businesses (with up to 100 employees) so they wouldn’t have to lay off staff.

To help, the central government took the responsibility of paying both the employee and employer’s share of EPF (Employees’ Provident Fund) contributions. This added up to 24% of the monthly wages for each employee, and it was provided for three months.

In addition to this, a massive relief package of ₹1.70 lakh crore (around US$ 23.22 billion) was announced by Finance Minister Nirmala Sitharaman to support the poor. This included food, cash transfers, and other assistance through various government schemes, all aimed at reducing the burden on the most vulnerable sections of society during the pandemic. The scheme was initially planned for three months, but it was extended until November 2020.

Policy Details

The Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2020 was launched to provide much-needed support to various groups affected by the economic crisis caused by the COVID-19 pandemic. The government recognized that some sections of society — like migrant workers, farmers, women, and both urban and rural poor — were hit the hardest during this time.

To help them, the government introduced several focused schemes under the PMGKY umbrella. Among them, three important schemes stood out for the direct support they offered to these vulnerable groups.

• PM Garib Kalyan Anna Yojana –
  • Provision of food grains to the poor (rural & urban) through the PDS
• Cash Transfer Scheme –
  • Rs. 500 (~US$ 6) each to women who have Jan Dhan account
• Insurance Scheme – 
  • Medical insurance to health workers including doctors, nurses, Asha workers, paramedics, and sanitation workers.

Components of PMGKY

The following are components of the PM Garib Kalyan Yojana package:

This is the world’s largest food security scheme started by the Government of India to tackle the economic problems caused by COVID. The main goal of the scheme is to make sure poor people have enough food by giving them items like 5 kg of rice or wheat per person and 1 kg per family every month completely free.

All people who have ration cards under the targeted public distribution system (TPDS), including those under Antyodaya Anna Yojana (AAY) and priority household (PHH) categories, can get food grains through this scheme. The main points of the scheme are:

• 80 crore people, which is about 66% of India’s population, were covered under this scheme
• Each of them got twice the usual amount of food grains they were getting earlier. This extra amount was given for free.
• To make sure people also got enough protein, families were given 1 kg of pulses (based on what people in that region usually eat)
• The Central Government decided to keep giving free food grains to 81.35 crore people, including AAY and PHH households, for five years starting from January 1, 2024. AAY families will get 35 kg of grains every month, and PHH members will get 5 kg per person per month.
• The government will spend Rs. 2.13 lakh crore (about US$ 25.7 billion) each year for this plan, adding up to about Rs. 11.80 lakh crore (around US$ 142.2 billion) over the next five years.

Insurance Scheme for Health Workers Fighting COVID-19

Under this scheme, the government provided insurance coverage for health professionals who were treating COVID-19 patients. If any of these healthcare workers died accidentally—either due to COVID or while on COVID-related duty—their family would get Rs. 50 lakh (around US$ 60,000) as compensation. The cost of this insurance scheme is being paid by the Ministry of Health and Family Welfare.

Public health workers such as community health workers, private hospital staff, and even retired people, volunteers, employees from local urban bodies, and staff hired on contract, daily wages, ad-hoc or outsourced basis—who were called in by central or state hospitals, AIIMS, autonomous hospitals, or hospitals run by central ministries—were all covered under this scheme.

In addition to doctors and nurses, workers like ‘safai karamcharis’ (sanitation workers), ward boys, ASHA workers, paramedics, technicians, specialists, and other frontline health workers were also included.

This scheme gave insurance coverage to around 22 lakh health workers who were on the frontlines of the pandemic.

Other prominent schemes launched or accelerated through PMGKY include the following:

Advance Payments to Farmers under PM KISAN
To help farmers during COVID, the government paid the first installment of PM Kisan Yojana early. The Rs. 2,000 (around US$ 24) payment meant for the 2020-21 period was released in April 2020 itself. About 8.7 crore farmers received it. As of July 2024, more than 11 crore eligible farmer families have benefited under PM KISAN, and Rs. 3.24 lakh crores (around US$ 38.71 billion) has been paid out.

Support to Low-wage Earners in Organised Sectors
To help small businesses and workers, the government said it would pay 24% of employees’ monthly wages into their Provident Fund (PF) accounts.

This benefit was for workers earning less than Rs. 15,000 (about US$ 180) per month and working in companies that have less than 100 employees.

Free Gas Cylinders to Poor Families
From April 2020, for three months, the government gave free LPG cylinders to over 8 crore families who were enrolled under the Pradhan Mantri Ujjwala Yojana (PMUY).

MNREGA Worker Support
From April 1, 2020, the government increased wages under the MNREGA scheme by Rs. 20 (about 24 cents). This was meant to give each worker an extra Rs. 2,000 (around US$ 24). About 13.62 crore families benefited from this support.

Support to Senior Citizens
To help senior citizens, widows, and people with disabilities, the government gave Rs. 1,000 (around US$ 12) for three months to about 3 crore people in these categories.

Other Measures
The government also changed the EPF rules to allow workers to withdraw up to 75% of their PF balance or three months’ wages (whichever is less) as a non-refundable amount—specifically due to the pandemic.

Additionally, the government used a special welfare fund meant for construction workers to provide help during the COVID crisis. This fund supported around 3.5 crore registered construction workers.

Scheme Outcome

Under the PM Garib Kalyan Package, the government gave out more than Rs. 68,820 crore (around US$ 9.4 billion) as cash or aid to help around 42 crore poor people across India.

• Rs. 30,952 crore (about US$ 4.23 billion) was directly transferred to the bank accounts of women who have accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY).
• Rs. 2,814.5 crore (about US$ 384.5 million) was given to 2.81 crore elderly people, widows, and people with disabilities.
• Rs. 17,891 crore (around US$ 2.44 billion) was paid to farmers as an early installment under the PM Kisan Yojana.
• Rs. 4,987 crore (roughly US$ 681.3 million) was given to support around 1.82 crore construction and building workers.

In addition to this:

• Rs. 2,476 crore (about US$ 338.25 million) was added to the EPF (Employees’ Provident Fund) accounts of around 43 lakh employees.
• Rs. 9,700 crore (about US$ 1.33 billion) was sent to beneficiaries of the PM Ujjwala Yojana to help them with cooking gas during the pandemic.

Conclusion

The PMGKY is moving quickly towards its goal of reducing poverty in the country. The scheme has not only helped bring back black money from tax evaders but also played a key role in dealing with the economic problems caused by the COVID pandemic. It provided a clear plan to support poor people during tough times and helped stop the gap between the rich and the poor from getting worse.

Through several schemes and packages under the PMGKY, the govt. has helped poor citizens continue their daily lives despite their inability to work.