Union Finance Minister Nirmala Sitharaman on Thursday announced an economic bailout package worth Rs 1.7 lakh crore to help the poor tide over the impact of the countrywide lockdown that is in place to contain the spread of the Covid-19 pandemic. The benefits – through cash and food – were targeted at farmers, migrant workers, the poor, women and the disabled, among others.
Sitharaman heads an economic task force announced by Prime Minister Narendra Modi last week to plan a response to the imminent financial crisis that Covid-19 may bring to India. The country entered a 21-day period of complete lockdown on Wednesday in a bid to break the chain of transmission of the highly contagious coronavirus.
Under the Pradhan Mantri Gareeb Kalyan Yojana, 80 crore poor will get additional food for free, over and above the Public Distribution System benefits they already get, Sitharaman said. This will comprise five kg of wheat or rice and one kg of pulses per household for the next three months.
Sitharaman said that under the farmers’ welfare scheme PM-KISAN, 8.69 crore farmers would immediately benefit through direct cash transfer of the first Rs-2,000 instalment for the upcoming financial year in the first week of April itself. The scheme gives three such instalments to farmers every year.
The finance minister announced medical insurance of Rs 50 lakh each for “our warriors – doctors, nurses, paramedics and other healthcare workers” who are on the frontline of the battle against Covid-19. The insurance cover for three months will benefit 20 lakh people, she added.
Sitharaman also announced an increase in wages of MGNREGA workers that will benefit five crore families. Every worker will get an additional wage of Rs 2,000 over the next three months. Women Jan Dhan account holders will get an ex gratia amount of Rs 500 per month for the next three months, said Sitharaman. This will benefit 20.5 crore women, the finance minister added.
Under the Ujjwala scheme, Sitharaman said, families below the poverty line will get free cooking gas for the next three months. There are nearly 8.3 crore beneficiaries of this scheme.
Self-help women groups will get collateral-free loans of up to Rs 20 lakh. This is likely to benefit seven crore households by increasing the cash in hand, said Sitharaman.
The finance minister said the government will pay the Employee Provident Fund contribution both of employer and employee – total 24% of the basic salary – for the next three months. “This is for those establishments which have upto 100 employees and 90% of them earn less than Rs 15,000,” Sitharaman added. The government will also amend the Employees’ Provident Fund Organisation regulation to allow non-refundable advance of 75% of the amount standing to the credit or three months’ wages, whichever is lower. “This will benefit 4.8 crore workers,” she said.
Sitharaman said the Centre has ordered states to use the corpus of Rs 31,000 crore to provide relief to construction workers whose livelihood has been hampered by the pandemic. She added that the Centre has also requested the state governments to use the district mineral fund to augment medical testing and screening and providing health attention.
On Tuesday, while announcing a slew of measures, Sitharaman had said that the “economic package” will be announced soon. During her last media briefing, Sitharaman had extended the deadline for filing income tax returns, waived cash withdrawal fee for using ATMs of other banks and relaxed threshold for insolvency proceedings to Rs 1 crore.
Announcing measures to provide relief to import and export businesses, the finance minister said that all Customs clearance portals will now operate round-the-clock till June 30. She also assured the public that the finance ministry and the Reserve Bank of India are monitoring the stock markets, which have hit uncharted levels of uncertainty ever since the outbreak of the coronavirus pandemic.
The risk the Covid-19 pandemic poses to the Indian economy is exacerbated by recent poor growth. India’s economic growth had slipped to a nearly seven-year low of 4.7% in the October-December, according to government data.