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?
- 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
- Fiscally prudent: By utilizing existing schemes funding for the package is kept within the budget so as to retain control over the deficit
- 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.
- 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