Union Finance Minister Nirmala Sitharaman gave India’s coronavirus pandemic fight Rs. 1.7 lakh crore relief package, at the same time, indirectly signalling that the government is foreseeing the COVID-19 lockdown to stay in India for up to three months.
With the country confined to their homes and business at grinding halt, the Indian government came out with the much-anticipated economic relief package. FM Nirmala Sitharaman’s Rs 1.7 lakh crore relief package caters to the unorganized sector, aiming to benefit 80 crore daily wage workers, and urban and rural poor directly under the Garib Kalyan Yojana. A mainstay word in the announcements from the FM was the plan to extend support for three months.
The unorganized sector of India counts for more than 90 per cent of the workforce and heavily depend on day to day earnings to make ends meet. A prolonged lockdown is expected to hit them the hardest. While the rich have already started stocking up essentials pre-empting the lockdown to continue, the poor are at the mercy of what relief the central government offers. The announcements will prove significant to keep a check on Coronavirus pandemic-induced malnutrition among India’s poor.
Relief for two-third population of India in the unorganized sector
FM Sitharaman said, “No one will go hungry”. The package aims to look after two-thirds of population guaranteeing them 5 kg rice or wheat per person and 1 kg of pulses per household free for the next three months, in addition to what they already get from the Garib Kalyan Yojana. FM offered relief for farmers announcing, the first tranche of their Rs. 6,000 annual benefit under the PM Kisaan Yojana, Rs. 2,000 per month will come to 8.69 crore farmers’ accounts in April first week.
Furthermore, poor senior citizens, widows and disabled will be provided ex-gratia Rs. 1,000 in two Rs. 500 instalments for the next three months. FM claimed 3 crore beneficiaries will come under this. Likewise, women with Jan Dhan accounts will get ex-gratia Rs 500 per month for the next three months, benefitting 20 crore women.
No one will go hungry.India’s Union Finance Minister Nirmala Sitharaman
The government also announced free cooking gas to 8.3 crores BPL families for the next three months. FM also announced EPF relief committing to pay the Provident Fund amounts (both the employee and employer shares) for companies with up to 100 employees with 90 per cent earning less than Rs 15,000 per month, again for a period of next three months. The announcement also earmarked Rs 50 lakh medical insurance per person as for paramedics, ASHA workers and doctors in India for three months.
India gears up for a prolonged medical battle
FM Sitharaman concluded by saying, “Hopefully, we’d be able to contain the virus in this period”. The economy at a standstill, businesses are treading warily and will read the government’s addresses with greater nuance to understand more than what’s being said. The market did see sunshine before FM’s press conference as Rupee gained against the dollar.You will find more infographics at Statista
However, the Finance Minister heads the financial task force and her evaluation of the situation is critical to understand how the government sees the pandemic folding. The relief packages for three months hint at how the government sees the lockdown in India to continue. Nevertheless, whether the relief package will suffice for the earnings lost will only be confirmed with time.