- Date : 10/06/2020
- Read: 6 mins
A wide-ranging economic package under Pradhan Mantri Garib Kalyan Yojana promises to give Indians some breathing space in the long fight against COVID-19.
The impact of the COVID-19 pandemic is being felt across the country. The spread of deadly novel coronavirus has left the economically weaker sections of society particularly vulnerable. The preventive lockdown announced by the government on the evening of 24 March 2020 only added to the desperation of migrant workers and daily wagers. Millions were left with nowhere to go after businesses and industrial establishments were shut down almost overnight.
To prevent a full-blown humanitarian crisis, Finance Minister Nirmala Sitharaman announced a wide-ranging relief package of Rs 1.70 lakh crore under the Pradhan Mantri Garib Kalyan Yojana on 26 March. The plan was aimed at providing financial relief to lakhs of poor and distressed families, farmers, migrant unorganised workers, senior citizens, and women in the low-income category.
Related: Finance Minister announces Rs 1.7 trillion relief package to fight Coronavirus
The comprehensive package was aimed at reassuring workers and businesses that were caught unawares by the turn of events. The staggered release of financial assistance was expected to make it easier for the government to enforce the lockdown. According to data released by the Ministry of Finance, more than 32 crore poor families received benefits worth Rs 29,352 crore under Pradhan Mantri Garib Kalyan Yojana by mid-April.
Benefits under Pradhan Mantri Garib Kalyan Yojana
The multi-pronged relief package provided under the Pradhan Mantri Garib Kalyan Yojana has a total of 6 components, each of which addresses the basic necessities of different demographic categories. Both cash benefits and emergency supplies are included in the plan. Let’s take a closer look at them.
1. Direct Cash Transfer
Under the plan, the government aims to provide direct cash benefit to poor and disadvantaged sections – including women, farmers, construction workers, and senior citizens – over a period of three months starting April 2020. For this purpose, Jan Dhan Yojana accounts are being revived by modifying anti money laundering regulations.
The Pradhan Mantri Jan Dhan Yojana, which was first launched in 2014, is part of the government’s ambitious initiative to provide universal access to banking services in the country. Eventually, a significant percentage of the basic bank accounts set up under the scheme were declared inactive for non-compliance with KYC norms and other reasons.
Women account holders are eligible for Rs 500 per month for the next three months via Direct Benefit Transfer, according to the Finance Minister. Accordingly, the Indian Banks Association announced a staggered schedule in early April to disburse the funds at branches while urging consumers to make use of ATMs as far as possible. The latest data suggests that more than 19.86 crore women received benefits worth Rs 9930 crore by mid-April.
Farmers will continue to receive cash benefits under PM-KISAN, an income support programme launched in December 2018. In April 2020, nearly 7.47 crore farmers received Rs 2000 as the first of three equal instalments provided at 4-month intervals. The government has already provided financial support of Rs 14,946 crore to farmers under the PM-KISAN scheme.
Senior citizens, widows, and differently abled individuals are also slated to get a one-time amount of Rs 1000 in two monthly instalments. Data shows that Rs 2.82 crore beneficiaries have received close to Rs 1400 crore under the initiative.
A dedicated fund has been created by the central government for workers engaged in the construction industry. It is meant to provide financial support to more than 3.5 crore registered workers, many of whom have lost their jobs due to the lockdown. Funds worth Rs 3071 crore have already been disbursed by state government agencies acting on behalf of the Centre.
Related: Government’s social welfare and health schemes – are you eligible?
2. Increased minimum wages under MNREGA
On a similar note, MNREGA workers will see an increase of Rs 20 in their wages starting 1 April 2020, with the minimum wage being hiked from Rs 182 to Rs 202. This is expected to benefit more than 13.62 crore families in the rural parts of the country. A sum of Rs 7100 crore has been provided to state governments for this purpose.
3. Free rations for the poor
The Finance Minister also acted to boost the supply of foodgrains to the poor through the public distribution network. More than 80 crore ration card holders are eligible for an extra 5 kg of foodgrains and 1 kg of pulses that are being provided from central government stocks. About 5.29 crore families have already benefited under this programme, which is officially known as the Pradhan Mantri Garib Kalyan Anna Yojana.
4. Free gas cylinders for BPL families
State-owned gas companies had already delivered 97.8 lakh LPG cylinders free of cost by to consumers by mid-April under the Pradhan Mantri Ujjwala Yojana. Launched in May 2016, this scheme provides LPG connections to families living below the poverty line. All consumers registered under the Yojana as of 31 March 2020 will be provided ‘Ujjwala’ cylinders between April and June 2020.
5. EPF benefits for low income workers
The government will contribute both the employer’s and the employee’s share of Employee Provident Fund (EPF) contribution from April to June 2020. This move aims at supporting companies with less than 100 workers who typically earn less than Rs 15,000 per month. Rs 1000 crore has been allocated for this purpose by the government.
Separately, the government has also approved a non-refundable advance of 75% of outstanding EPF balance or 3 months’ wages to all salaried employees who wish to avail of it. The latest data shows that more than 2.1 lakh EPFO members have already taken advantage of the scheme.
Related: 7 Government schemes to aid economic development and financial stability that you can benefit from
6. Enhanced health insurance coverage for health workers
Public sector general insurer New India Assurance has rolled out a special health insurance plan for medical professionals, which includes doctors, sanitation workers, paramedics, nurses, and support staff. It is fully paid for by the government under the Pradhan Mantri Garib Kalyan Yojana. A sum insured of Rs 50 lakh is available for a period of 90 days starting from 1 April 2020 if they suffer accidental death or injury while treating patients at government hospitals or clinics throughout the country, or become infected themselves.
Due to the critical nature of the scheme, no prior enrolment is required for coverage. There is no minimum age limit for entry into the scheme either. This cover will be additional to any pre-existing health insurance policy that a beneficiary may already have to their name. This benefit is being extended to more than 22.12 lakh of the country’s health workers on the front line in the fight against COVID-19.
Related: Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana: What you need to know
Last words
The Pradhan Mantri Garib Kalyan Yojana is expected to be the first of several steps planned by the government to insulate the economy from the after-effects of the COVID-19 crisis. Expedited tax refunds can also be seen as an extension of these measures, which could culminate in a larger stimulus package a few months down the line. Do you want to what are the new schemes announced in Budget 2020. Read it here.
The impact of the COVID-19 pandemic is being felt across the country. The spread of deadly novel coronavirus has left the economically weaker sections of society particularly vulnerable. The preventive lockdown announced by the government on the evening of 24 March 2020 only added to the desperation of migrant workers and daily wagers. Millions were left with nowhere to go after businesses and industrial establishments were shut down almost overnight.
To prevent a full-blown humanitarian crisis, Finance Minister Nirmala Sitharaman announced a wide-ranging relief package of Rs 1.70 lakh crore under the Pradhan Mantri Garib Kalyan Yojana on 26 March. The plan was aimed at providing financial relief to lakhs of poor and distressed families, farmers, migrant unorganised workers, senior citizens, and women in the low-income category.
Related: Finance Minister announces Rs 1.7 trillion relief package to fight Coronavirus
The comprehensive package was aimed at reassuring workers and businesses that were caught unawares by the turn of events. The staggered release of financial assistance was expected to make it easier for the government to enforce the lockdown. According to data released by the Ministry of Finance, more than 32 crore poor families received benefits worth Rs 29,352 crore under Pradhan Mantri Garib Kalyan Yojana by mid-April.
Benefits under Pradhan Mantri Garib Kalyan Yojana
The multi-pronged relief package provided under the Pradhan Mantri Garib Kalyan Yojana has a total of 6 components, each of which addresses the basic necessities of different demographic categories. Both cash benefits and emergency supplies are included in the plan. Let’s take a closer look at them.
1. Direct Cash Transfer
Under the plan, the government aims to provide direct cash benefit to poor and disadvantaged sections – including women, farmers, construction workers, and senior citizens – over a period of three months starting April 2020. For this purpose, Jan Dhan Yojana accounts are being revived by modifying anti money laundering regulations.
The Pradhan Mantri Jan Dhan Yojana, which was first launched in 2014, is part of the government’s ambitious initiative to provide universal access to banking services in the country. Eventually, a significant percentage of the basic bank accounts set up under the scheme were declared inactive for non-compliance with KYC norms and other reasons.
Women account holders are eligible for Rs 500 per month for the next three months via Direct Benefit Transfer, according to the Finance Minister. Accordingly, the Indian Banks Association announced a staggered schedule in early April to disburse the funds at branches while urging consumers to make use of ATMs as far as possible. The latest data suggests that more than 19.86 crore women received benefits worth Rs 9930 crore by mid-April.
Farmers will continue to receive cash benefits under PM-KISAN, an income support programme launched in December 2018. In April 2020, nearly 7.47 crore farmers received Rs 2000 as the first of three equal instalments provided at 4-month intervals. The government has already provided financial support of Rs 14,946 crore to farmers under the PM-KISAN scheme.
Senior citizens, widows, and differently abled individuals are also slated to get a one-time amount of Rs 1000 in two monthly instalments. Data shows that Rs 2.82 crore beneficiaries have received close to Rs 1400 crore under the initiative.
A dedicated fund has been created by the central government for workers engaged in the construction industry. It is meant to provide financial support to more than 3.5 crore registered workers, many of whom have lost their jobs due to the lockdown. Funds worth Rs 3071 crore have already been disbursed by state government agencies acting on behalf of the Centre.
Related: Government’s social welfare and health schemes – are you eligible?
2. Increased minimum wages under MNREGA
On a similar note, MNREGA workers will see an increase of Rs 20 in their wages starting 1 April 2020, with the minimum wage being hiked from Rs 182 to Rs 202. This is expected to benefit more than 13.62 crore families in the rural parts of the country. A sum of Rs 7100 crore has been provided to state governments for this purpose.
3. Free rations for the poor
The Finance Minister also acted to boost the supply of foodgrains to the poor through the public distribution network. More than 80 crore ration card holders are eligible for an extra 5 kg of foodgrains and 1 kg of pulses that are being provided from central government stocks. About 5.29 crore families have already benefited under this programme, which is officially known as the Pradhan Mantri Garib Kalyan Anna Yojana.
4. Free gas cylinders for BPL families
State-owned gas companies had already delivered 97.8 lakh LPG cylinders free of cost by to consumers by mid-April under the Pradhan Mantri Ujjwala Yojana. Launched in May 2016, this scheme provides LPG connections to families living below the poverty line. All consumers registered under the Yojana as of 31 March 2020 will be provided ‘Ujjwala’ cylinders between April and June 2020.
5. EPF benefits for low income workers
The government will contribute both the employer’s and the employee’s share of Employee Provident Fund (EPF) contribution from April to June 2020. This move aims at supporting companies with less than 100 workers who typically earn less than Rs 15,000 per month. Rs 1000 crore has been allocated for this purpose by the government.
Separately, the government has also approved a non-refundable advance of 75% of outstanding EPF balance or 3 months’ wages to all salaried employees who wish to avail of it. The latest data shows that more than 2.1 lakh EPFO members have already taken advantage of the scheme.
Related: 7 Government schemes to aid economic development and financial stability that you can benefit from
6. Enhanced health insurance coverage for health workers
Public sector general insurer New India Assurance has rolled out a special health insurance plan for medical professionals, which includes doctors, sanitation workers, paramedics, nurses, and support staff. It is fully paid for by the government under the Pradhan Mantri Garib Kalyan Yojana. A sum insured of Rs 50 lakh is available for a period of 90 days starting from 1 April 2020 if they suffer accidental death or injury while treating patients at government hospitals or clinics throughout the country, or become infected themselves.
Due to the critical nature of the scheme, no prior enrolment is required for coverage. There is no minimum age limit for entry into the scheme either. This cover will be additional to any pre-existing health insurance policy that a beneficiary may already have to their name. This benefit is being extended to more than 22.12 lakh of the country’s health workers on the front line in the fight against COVID-19.
Related: Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana: What you need to know
Last words
The Pradhan Mantri Garib Kalyan Yojana is expected to be the first of several steps planned by the government to insulate the economy from the after-effects of the COVID-19 crisis. Expedited tax refunds can also be seen as an extension of these measures, which could culminate in a larger stimulus package a few months down the line. Do you want to what are the new schemes announced in Budget 2020. Read it here.
