NEW DELHI: The Centre on Thursday announced a Rs 1.7 lakh crore economic stimulus plan including direct cash transfers and free foodgrain in a bid to give relief to the poor hit by a nationwide lockdown over the pandemic. The package combined old schemes such as direct cash transfers to farmers with fresh relief measures including a wage increase for the Mahatma Gandhi National Rural Employment Guarantee programme, and dipped into existing funds such as building and construction workers welfare fund, to offer relief to the poor. Of the Rs 1.7 lakh crore announced by the FM, Rs 70,000 crore was already budgeted for under existing schemes.
“The government is using existing schemes as it is easier to identify beneficiaries. This needs to be complemented with more sectoral plans,” said Prof N R Bhanumurthy of the National Institute of Public Finance and Policy. While experts welcomed the emergency relief measures to help the poor, many feel the government needs to do more.
“The package is not going to help with the extreme collapse of activity we have seen,” said Jayati Ghosh, professor, Jawaharlal Nehru University. “A lot of the schemes announced were existing ones. MGNREGA wage increase was anyway overdue. Because there is no work and we are talking about complete closure of economic activities, the money should be directly transferred to the accounts of the MGNREGA workers,” she added.
The measures won’t mitigate the crisis, especially for rural workers, said Arun Kumar, economics professor at Institute of Social Sciences, New Delhi. “It is welcome, but it may not be enough when we are estimating a loss of Rs 9 lakh crore to our GDP because of the coronavirus crisis.” Over eight crore farmers, who were given Rs 6,000 relief money last year, will be given the first instalment of Rs 2,000 soon as many are unable to sell their produce as supply chains remain disrupted. For the organised sector, the FM said the government will pay both employers’ and employees’ PF contribution for three months.
Centre allows withdrawal of 3 months salary from EPFO
This is applicable to all firms with less than 100 employees, of whom 90 per cent earn less than Rs 15,000 per month. Workers have also been allowed to withdraw up to three months wages or 75 per cent of their money in the EPFO, whichever is less, to tide over the problems due to the Covid-19 outbreak.
Sitharaman said states have been asked to use cess collected for the Building and Other Construction Workers’ Welfare Fund, which has a corpus of Rs 31,000 crore, to help around 3.5 crore registered construction workers. While several states have already started doing so over the past few days, around 1.5 crore unregistered workers have been left out without any assistance.
The package also aims to hand out free cooking gas cylinders to 83 million poor families, in addition to direct cash transfers of Rs 500 a month for three months to 20 crore women and the elderly through their Jan Dhan accounts. Around three crore widows and disabled persons would also be given Rs 1,000, while the money self-help groups could borrow without a collateral has been doubled to Rs 20 lakh.