Thirty-six hours after the 21-day lockdown was announced, the government moved to keep some 80 crore Indians in food, fuel and cash, announcing a ₹1.70-lakh-crore relief package.
Farmers, MGNREGA workers, senior citizens, women and low-wage earners in the organised sector will be the main beneficiaries of the package.
The government announced a special insurance scheme for health workers fighting Covid-19. The scheme will provide an insurance cover of ₹50 lakh and will benefit 22-lakh health workers.
Finance Minister Nirmala Sitharaman said: “Since the lockdown has been in force (Wednesday), we have come out with a package which will immediately take care of the concerns and welfare of poor and suffering workers and those who need immediate help.”
The Finance Minister indicated that work is in progress for other sectors and an announcement will be made soon.
More measures may follow
On the impact of this package on the fiscal deficit or the need for additional borrowing, she refused to give details. However, a senior government official admitted that spending will go up, but added that it was difficult to say by how much, as the situation was evolving and there could be a further stimulus.
On the proposal of higher allotment of foodgrain, Sitharaman said the free foodgrain and pulses being given through the public distribution system (PDS) would be over-and-above the existing entitlement. Ration card holders can obtain foodgrain and pulses from the PDS in two instalments, she added.
According to official data, the government has 58.49 million tonnes (mt) of foodgrain in FCI godowns — 30.97 mt of rice and 27.52 mt of wheat. The foodgrain stock is much higher than the required reserve norm of 21 mt as on April 1.
Relief for farmers, MSMEs
To provide relief to farmers, Sitharaman said: “Farmers receive ₹6,000 annually under PM Kisan. We will now be giving the first instalment of that so that at the beginning of the year they will get ₹ 2,000.” This will immediately benefit 8.69-crore farmers.
For low-wage workers in Micro, Small and Medium Scale Enterprises, the government will contribute the employees’ as well as employers’ PF contribution, which works out to 24 per cent of the provident fund for the next three months. This is for units with up to 100 employees and 90 per cent earning less than ₹15,000 a month.
Also, workers will be allowed to draw a non-refundable advance of 75 per cent from the credit in their PF account or three months’ salary, whichever is lower, she said.
Saraswathi Kasturirangan, Partner at Deloitte India, said the proposal to permit non-refundable advance to employees out of their PF balances will help many tide over the liquidity issues.
Pawan Munjal, Chairman, Hero MotoCorp, said, “We now look forward to a stimulus for the national economy which will be most severely impacted due to the ongoing situation.”
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