Coronavirus: FM Nirmala Sitharaman Unveils Package For the Poor

Named Pradhan Mantri Garib Kalyan Yojana, the stimulus package includes measures related to food security and direct cash transfer. It is expected to benefit urban and rural poor and migrant workers over the next three months.

By Shipra Singh & Debroop Roy


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India's finance minister Nirmala Sitharaman on Thursday announced a comprehensive fiscal package of INR 1.7 lakh crore for the poor to help them fight the economic stress caused by the coronavirus disease (COVID-19).

Named Pradhan Mantri Garib Kalyan Yojana, the stimulus package includes measures related to food security and direct cash transfer. It is expected to benefit urban and rural poor and migrant workers over the next three months (April-June). Aimed at the poorest of the poor, the package will ensure that no one starves or struggles to buy the most basic household essentials during this crisis, said Sitharaman.

The scheme will cater to two broad categories of people—healthcare professionals working on the forefront of COVID-19 pandemic and the poor whose livelihoods have been hit due to the countrywide 21-day lockdown, announced by the Prime Minister on March 24.

Entrepreneur India gives a roundup of who all will benefit under the fiscal package.

Insurance for Health Workers

A special health insurance cover of INR 50 lakh will be given to all healthcare professionals, including ward-boys, nurses, cleaning workers, paramedics, technicians, doctors and specialists, working in government hospitals and health care hospitals where covid-19 patients are being treated.

The insurance scheme will cover hospitalisation expenses of anyone who falls sick while treating a covid-19 patient. Take note that if a healthcare worker dies as a result of contracting the covid-19 virus, no life insurance cover will be provided.

All central and state government hospitals, health centres and wellness centres will be covered under this scheme, benefitting nearly 22 lakh health workers, the official statement said.

Food Related Benefits

PM Garib Kalyan Ann Yojana will provide free ration to 80 crore individuals (1/3rd of the population) over the next three months.

Each individual will get 5 kg of rice or wheat, over and above the current monthly 5 kg given under the public distribution system (PDS). Additionally, 1 kg of pulses per household will be given according to the receiver's regional preference. Beneficiaries can avail this in two installments.

This food subsidy scheme will cost the government INR 40,000 crore, as per the statement.

Cash Support

Cash support through Direct Benefit Transfer (DBT), is aimed at eight broad categories—farmers, MGNREGA, widows, pensioners and divyang, women under Jan Dhan Yojana and Ujjawala scheme, women in self-help groups, organised sector workers, construction workers and utilization of district mineral funds.

1. Farmers – About 8.7 crore farmers will get the first installment of INR 2,000 under PM Kisan Yojana in April. Under this scheme, all eligible small and marginal farmers get INR 2,000 every fourth month (total INR 6,000 annually) as minimum income support.

2. MGNREGA – Daily wages under Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), has been hiked by INR 20, from INR 182 to INR 202. This will be effective from April 2020 and is expected to benefit about 5 crore workers.

3. Widows, senior citizens and Divyang: In a relief to poor widows, senior citizens and divyang or disabled people, a one-time ex-gratia of INR 1,000 will be given in two installments. A total of INR 3,000 crore will be spent for this purpose under PM Garib Kalyan Package, the statement said.

4. Women Jan Dhan account holders and beneficiaries of Ujjawala Scheme: An ex-gratia amount of INR 500 per month will be given to 20 crore women Jan Dhan account holders. This step will help women to run their household during this difficult period, said the statement.

Also, women beneficiaries under the Ujjwala scheme will be given three free gas cylinders for the next three months to ensure that they don't run short of cooking medium, the FM said. PM Ujjwala scheme was started to distribute 5 crore LPG connections to below poverty line (BPL) families.

5. Under the Deen Dayal National Livelihood Mission, FM Sitharaman said about 63 lakh women self-help groups will be able to get collateral-free loans of upto INR 20 lakh, double of what was allowed before. This is likely to benefit 6.85 crore households.

SHGs have been an area of focus for the finance minister. Last year, Sitharaman said one woman in every SHG would be able to avail a loan of up to INR 1 lakh under the MUDRA scheme.

6. The government will pay the EPF contribution of both the employer and the employee, a cumulative 24 per cent, for the next three months. This is for those establishments which have up to 100 employees, and 90 per cent of them earn less than INR 15,000 per month.

A total of INR 5,000 crore is being provided for this purpose, the statement said.

To help the 4.8 crore workers registered with the EPFO, the government has amended regulations, allowing them to withdraw up to 75 per cent of non-refundable advance amount or 3 months worth of salary, whichever is lower to help with emergencies.

7. State governments have been directed by the Centre to utilize existing welfare funds - amounting to about INR 31,000 crore - for construction workers to aid all such workers facing any economic problem due to the lockdown. This will benefit 3.5 crore registered workers.

8. FM said that the Narendra Modi-led government has also asked states to utilize funds available under the district mineral fund to facilitate more testing, screening, as well as providing better healthcare that is needed to fight the pandemic.

Cash benefits, wherever applicable, will be directly transferred to the beneficiary's bank account. On being questioned what happens to those who do not have a bank account, FM insisted that media persons inform the government of such people so that the latter can extend support to them as well.

On 24 March, the FM had announced a slew of measures related to compliance and regulation to provide relief to businesses struggling with the economic impact of coronavirus.

Prime Minister Narendra Modi on Tuesday announced an unprecedented countrywide lockdown for three weeks, ending April 14, following a near-complete shut down on public transport. He had said the government was making a provision of INR 15,000 crore for measures to stop the spread of the virus.

At least 649 people have been tested positive with the virus in India, a steep increase from only a week ago, while the number of casualties stands at 13. Globally, the death toll has crossed 21,000.

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