Pradhan Mantri Garib Kalyan Yojana (PMGKY)- India’s relief package for COVID-19

  • IASbaba
  • March 27, 2020
  • 0
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Topic: General Studies 2 and 3:

  • Government Schemes and policies
  • Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Pradhan Mantri Garib Kalyan Yojana (PMGKY)- India’s relief package for COVID-19

The ₹1.7 Lakh Crore relief package – named PMGKY- was announced by Union government to alleviate the distress caused by COVID-19 pandemic.

Do You Know?

  • The cost of the COVID-19 lockdown in India is pegged at nearly ₹9 lakh crore
  • This is the third shock that the informal economy faces, after demonetisation and GST.
  • US announced 2 trillion USD (Rs 148 Lakh crore) stimulus package to fight COVID-19

The Key features of PMGKY are:

  • Healthcare Workers: Insurance cover of ₹50 lakh
  • Food grains to Poor: 80 crore poor people under National Food Security Act will receive five extra kg of wheat or rice and 1 kg of pulses
  • MGNREGA workers (13.63 crore): Wage increased from ₹182/day to ₹202/day
  • Jan Dhan Women Account holders (20.4 crore): DBT of ₹500/ month for next three months 
  • Senior Citizens, disabled & Poor widows (3 crore): Ex-gratia of ₹1000 (through existing pension schemes)
  • Farmers (8.7 crore): Front loading of ₹2000 to them under existing PM Kisan Yojana
  • Ujjwala Beneficiaries (8.3 crore): Free cylinders for next three months
  • Wage earners: Those earning below ₹15000/month in firms having less than 100 workers will receive 24% of their monthly wages into their PF accounts for next three months
  • Construction workers: Centre has directed States to use Construction worker’s welfare fund to give relief to 3.5 crore registered workers

Is there a specific strategy used by government in this relief package?

  1. Government has followed two-pronged approach
    • Ensuring a steady supply of food and cooking gas to poor people
    • Easing cash woes of the vulnerable sections of society
  2. Fiscally prudent: By utilizing existing schemes funding for the package is kept within the budget so as to retain control over the deficit 
  3. Preserving Financial resources -Given the uncertainty over the length of crisis – government may announce future relief packages to adapt with changing situation


  • Modest cash transfer might not be enough given the drying up of incomes for the vulnerable sections of society
  • Implementation issues: People may face difficulties to draw money from their accounts during the lockdown
  • Migrant labourers may find difficulties to access the extra food grain announced
  • Package does not address the challenges being faced by Informal MSMEs and other hard-hit sectors.

Way ahead:

  • Intervention by RBI like providing regulatory forbearance, moratorium on interest payments, changing classification norms, and ensuring easy access to credit. 
  • Centre needs to enhance the resources of State through measures like
    • Releasing all the pending dues owed to the state governments on account of GST compensation. 
    • Assist states in raising finances from markets (by giving sovereign guarantees)
    • Sharing bonanza from fall in Crude Oil Prices
    • Consult States to ensure that supply chain, spread across multiple states, of essential commodities is not disrupted
    • Harvest time – may lead to price fall or wastage due to disruption caused by lockdown – States to be financially supported (agriculture is a State subject)
  • Civil Society and Corporates needs to pitch in during this crisis with their financial and human resources

Connecting the dots:

  • Compassionate Capitalism
  • What all needs to be included in the relief package- II which would be focused on middle class & corporate sector?
  • N. K. Singh Panel recommendations on fiscal deficit range 

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