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
Challenges:
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)
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
