Finance Minister announces Rs 1.7 trillion relief package to fight Coronavirus

The FM announced Rs 1.7 trillion relief package under the PM Garib Kalyan Yojana to ease the burden for the poor who will be the most affected by the lockdown

Finance Minister announces Rs 1.7 trillion relief package to fight Coronavirus

In an eagerly anticipated move, Finance Minister, Ms. Nirmala Sitharaman announced Rs 1.7 trillion relief package designed primarily for the poor, who are going to be the worst affected due to the broad-based lockdowns announced to mitigate the impact of Coronavirus pandemic. 

The announcement comes as a welcome follow-up to a host of measures announced earlier on March 24, 2020, that included extension for ITR filing deadlines and easing of compliance norms related maintaining minimum bank balance.

What does the relief entail?

The disbursals will come under the PM Garib Kalyan Yojana and will include both cash transfer and food security benefits.

Cash benefits through Direct Benefit Transfer (DBT):

  • Low wage earners (less than Rs 15,000 per month) to receive EPF contribution up to 24% of the salary from the Government for the next three months.
  • Three crore widows and senior citizens to receive an ex-gratia amount of Rs 1,000 for next three months to tide over tough times.
  • About 20.4 crore Jan Dhan Yojana women account holders to receive an ex-gratia amount of Rs 500 for next three months.
  • Eight crore poor families to receive three gas cylinders free of cost for the next three months.

Related: Coronavirus pandemic: Govt to provide relief to employees and firms 

Food security benefits through Public Distribution System (PDS):

  • An estimated 80 crore people to receive double the ration. 5 kg rice or wheat will be provided free of cost to each poor household every month for the next three months. 
  • The distribution of 5 kg of rice and wheat will be over and above the 5 kg already disbursed under the Gareeb Kalyan Yojna.
  • An additional 1 kg of protein rich pulses/ legume (region specific) per family would be provided for the same period.

Related: 7 Government schemes to aid economic development and financial stability that you can benefit from 

What are the other measures?

The FM has announced additional benefits for health care workers, farmers, self-help groups, and daily wage workers.

  • All doctors, nurses, paramedics, technicians, cleaners, ward-boys, and other health care professionals to be covered by a Special Insurance Scheme.
  • Any frontline health workers, who are treating Covid-19 patients, will receive an insurance coverage of up to Rs 50 lakh , if they are diagnosed with coronavirus positive.
  • All government health care centres and hospitals would be covered under the Special Insurance Scheme too.
  • About 8.69 crore farmers to receive DBT of Rs 2,000 for the month of April 2020.
  • Five crore workers under MNREGA to receive an increase in wage from Rs 182 to Rs 202, starting April 2020.
  • Seven crore women from 63 lakh self-help groups to benefit from collateral-free loans of Rs 20 lakh up from Rs 10 lakh under the Deen Dayal National Livelihood Mission.

Related: FM Sitharaman announces economic relief measures to quash coronavirus impact 

What else can be expected?

The Prime Minister has set up an Economic Task Force that will be headed by the Finance Minister. We can expect another relief package aimed at the institutional set-up. 

The lobby group of the Confederation of Indian Industry (CII) is seeking a stimulus package of 1% of the GDP, estimated at Rs 2 lakh crore, and a three-month moratorium on all loans, as well as a request to suspend all repayment obligations during the period. 

The pandemic coupled with the 21 day lockdown is expected to hit businesses hard, and various rating agencies have downgraded India’s growth estimates for FY 2021-22. Budget 2020: What are the new schemes you need to know about?
 

 

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