Shabir Ahmad
The government of India has announced a massive economic relief package of Rs 1.7 Lac crore to support the poor and vulnerable sections and help them overcome the economic impact of COVID-19 lockdown. This relief package has been announced as a part of PM Garib Kalyan Yojna. But, before we look at the features of this Package, first let’s understand why government should be extending economic support to the vulnerable sections during this period of lockdown.Vulnerable sections such as, migrant workers, daily wage earners, poor women, old age people, the disabled, widows and small business owners; have been severely affected by the COVID-19 lockdown. Because majority of them work in informal sector and the imposition of total lockdown has resulted in the loss of livelihood to these vulnerable sections. Among these vulnerable sections, the biggest impact is being borne by migrant workers who are generally daily wage earners. Stories have emerged across the country highlighting the loss of livelihood of migrant workers and how they have been forced to abandon the cities and migrant back to rural areas on foot, due to non availability of means of transportation. This plight of migrant workers highlight India’s economic weakness and lack of social infrastructure in the Indian society. Millions of migrant workers from across the country have been forced to abandon the cities because of loss of their daily income; has made it impossible for them to access basic necessities such as, shelter, food ,etc. The biggest tragedy of this ongoing reverse migration is that children of migrant workers and even pregnant women and lactating women have been denied the benefits of mid-day meals. This is going to affect the nutritional status of children and women and this is going to lead starvation and malnutrition. So, in order to avert this humanitarian crises, the government of India has announced a massive economic relief package under PM Garib Kalyan Yojna; in order to support the poor and vulnerable sections of the society. This scheme which is valued a 1.7 lac crore rupees; provides for wide coverage to include women, construction workers, small companies, land owning farmers, MGNREGA workers in rural areas, old age people, disabled, widows, etc. This scheme include two main components: one, it provides for free food grains in order to meet the nutritional requirements of vulnerable sections; and two, it provides for cash transfers in order to support the loss of livelihood of these vulnerable sections.
Economic experts and social scientists have provided a massive review of this economic relief package. They have praised government of India for coming out with such a massive relief package in order to help the country to overcome the economic impact of the lockdown. They have appreciated a number of measures such as, the provision of insurance coverage for healthcare workers, the provision of free food grains and pulses in order to meet nutritional requirements of poor and vulnerable sections, the provision of cash transfers to supplement the income of weaker sections, the provision of free LPG cylinders to around 8 crore BPL families under PM Ujwala Yojna, etc. over the next three months. But the critics have also highlighted a number of loopholes and drawbacks of this economic relief package. For instance, if you look at the provision of free food grains, it is being provided through PDS and hence only those who posses a ration card would be eligible for the benefits of the scheme. The eligibility requirements of this scheme makes it exclusive only to ration card holders and it could exclude a number of migrant workers who may not posses this required document. The government of India should have followed Kerala Model, which provides for universal coverage of free food grains in order to ensure that no person goes hungry during the period of lockdown. It has also been pointed out that relief package doesn’t talk about Mid-day meal scheme or the establishment of community kitchen, which could have provided basic food/nutrition to young children, pregnant women, hungry migrant workers and truck drivers. Such benefits are already being provided by the governments of Delhi and Kerala. So, this is something that is missing from the economic relief package that has been announced by the central government. The cash transfers being provided to pensioners, disabled and women is not substantial and the amount could have been increased. It has also been pointed out that minimum hike in MGNREGA wages may not benefit the rural families because panchayats have already stopped all MGNREGA related works due to the lockdown. So, as a result, this promise of an additional income of Rs 2000 per worker may not be realised.Then, if you look at the changes that has been made to PM-Kisan, EPF contribution and support to the construction workers, the government of India has not allotted any new funds, but instead, it has just redistributed the existing budgetary allocation. So, on all these accounts, the economic and social scientists say that this economic relief package is just a good start and is not sufficient to meet the economic challenges that the country is facing. Off course, such a massive relief package requires enormous amount of resources and the government is just trying to balance between its available resources and the needs of the people.It is quite clear, that government has made a conscious attempt to stay within its budgetary limit and not to breach its fiscal deficit targets. Due to this economic relief package, the central government will be breaching its fiscal deficit target only by a very small margin. In comparison to countries such as, The USA, Germany and other European countries which have provided for a massive economic stimulus. They are going to breach their fiscal deficit targets by around 10 to 12 percent. It means that these governments have accommodated a fiscal expansion or budgetary expansion of around 10 to 12 percent, in order to support their economies to cop with the impacts of COVID-19 Pandemic. In total, the relief package accounts for just 7.5 % of India’s GDP and it provides only a marginal relief to the poor and vulnerable sections. The government has definitely made a good beginning and it can be expected that it will come out with the second relief package of few weeks or few months down the line, which would provide incentives to medium and large scale industries as well.This is where India could draw a lesson from the massive economic packages that are being worked out by other countries such as, the USA and Germany. For instance, the USA is in a process of working out a massive economic package of amount around two trillion US dollars and these economic packages provide benefits not only to the vulnerable sections but also to the industries and salaried class.
(The Author is a Freelancer. Views are his own, [email protected])
