Economy

Covid-19: FM’s measures inadequate even for lockdown period, say economists, activists

Our Bureau New Delhi | Updated on March 27, 2020 Published on March 27, 2020

Falling short on many fronts, including pensions, rations, programmes for farmers and workers

Several prominent economists, academics and activists have said that the ₹1.7-lakh crore relief package announced by Finance Minister Nirmala Sitharaman on Thursday, although wide-ranging in scope to deal with the economic fallout of Covid-19 pandemic, falls short of what is required to support the vulnerable, and prevent a deepening of the ongoing economic slowdown.

This group of more than 600 economists, academics, activists and other concerned citizens had earlier this week urged the government to announce a much larger relief package, which included ₹3.75 lakh crore as emergency cash transfer to poor households. That involved transferring ₹7,000 per month to 26.8 crore households during April and May. They had also said that access to any rights and entitlements should not depend on Aadhaar-based biometric systems, due to possible spread of infection through touch.

The group includes social activist Harsh Mander, National Federation of Indian Women President Aruna Roy, National Federation of Indian Women General Secretary Annie Raja, Mazdoor Kisan Shakti Sangathan founder member Nikhil Dey, Ranchi University Visiting Professor Jean Dreze, Jawaharlal Nehru University Professor of Economics, and Jayati Ghosh, Professor of Economics.

What about exclusions from PDS?

The relief measures have fallen short of the measures suggested regarding the ongoing programmes on pensions, rations and programmes for farmers and workers, in a statement issued on Thursday night. They also pointed out that there were no clear measures for migrant workers, hit hardest by the shutdown.

Welcoming the announcement of free rations of foodgrain for the next three months, the group felt the Centre had not mentioned how those excluded from the PDS system would be provided.

No additional resource

On the announcement of wage increase under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the group said the announcement of ₹2,000 increase in average earnings of households who have signed up for the scheme was a misnomer. The wage increase, notified on Monday, March 23, was a regular adjustment against inflation made annually.

It cannot be called an ‘additional resource’ when the Union government had not adhered to the constitutional provision of minimum wages for MGNREGA, they said. “It would be far more effective for each MGNREGA worker to be paid the full notified minimum wage rate for every day of the lockdown at a time when MGNREGA works have been shut to prevent proximity,” their statement read.

They has also pointed out that much more work might need to be created under MGNREGA in the new financial year, as a large number of migrant workers had returned to their native villages from urban centres. Also, the limit of 100 days of work per rural household should be removed.

Inadequate cash transfers

On cash transfer of ₹1,000 to pensioners for three months, the group said that was also inadequate, as it is only an increase of ₹500, and that it was better to pay in advance an amount of ₹1,000 per month for three months. They noted that the Finance Minister made no announcement for pregnant women and mothers and it is not clear how they will access even their existing entitlements, given that Aadhaar-based cash withdrawal should not be an option.

The cash transfer of ₹500 per month for three months to the Jan Dhan Yojana account holders was inadequate, the statement said, recommending payment of notified agricultural minimum wages of the state for 26 days of a month for three months, and making it universal to include the poor who did not have Jan Dhan accounts. The cash transfer to construction workers should not be restricted to only those registered under the building and other construction workers board but given to all construction workers, the group said.

They have also questioned why the government is proposing to give the first instalment of cash transfer under PM-KISAN to only 8.7 crore farmers when the number of beneficiaries was about 14 crore. The PM-KISAN needs to be expanded to allow one-time payment of ₹6,000 to tenant farmers and beneficiaries of Forest Rights Act, the statement said.

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Published on March 27, 2020
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