Lockdown and Relief Package

Why in news?

The Union government announced a Rs. 1.70 lakh crore ($22.6 billion) package under Pradhan Mantri Garib Kalyan Yojana to deal with the impact of the coronavirus outbreak.

About

• In the wake of a looming threat from coronavirus outbreak, the government announced a 21-day national lockdown beginning from 25th of March.
• It has triggered supply constraints for essential items and panic buying, leaving the poor and daily labourers most vulnerable.
• The government announced a Rs 1.70 Lakh Crore relief package under Pradhan Mantri Garib Kalyan Yojana to deal with the situation and fight the battle against Corona Virus.

Pradhan Mantri Garib Kalyan Yojana

I. Insurance scheme for health workers fighting COVID-19 in Government Hospitals and Health Care Centres:

• Safai karamcharis, nurses, ASHA workers, doctors and other health workers would be covered by a Special insurance Scheme, where they would be compensated with an amount of Rs 50 lakh in case of accidents.
• Approximately 22 lakh health workers would be provided insurance cover. All government health centres, wellness centres and hospitals of Centre as well as States would be covered under this scheme. 

II. PM Garib Kalyan Ann Yojana:

• To tackle the non-availability of food grains to the poor due to the disruption, the government would provide double the current entitlement over next three months.
• Also, to ensure adequate availability of protein, pulses will be provided (1kg per family) according to regional preferences for next three months.
• These additional entitlements will be free of cost. 80 crore individuals, i.e, roughly two-thirds of India’s population would be covered under this scheme.  

III. Cash transfers:

• For farmers, the first instalment of Rs 2,000 under the PM KISAN Yojana will be paid in April 2020 itself.
• PM Jan Dhan Yojana women account-holders would be given an ex-gratia payment of Rs 500 per month for next three months.
• Government will give aged widows and people in Divyang category Rs 1,000 to tide over difficulties during next three months.

IV. Other monetary supports:

• Gas cylinders, free of cost, would be provided to 8 crore poor families for the next three months.
• Wage-earners below Rs 15,000 per month in businesses having less than 100 workers are at risk of losing their employment. Government proposes to pay 24% of the monthly wages into their PF accounts for next three months.
• MNREGA wages would be increased by Rs 20 with effect from 1 April, 2020. Wage increase under MNREGA will provide an additional Rs 2,000 benefit annually to a worker. This will benefit approximately 13.62 crore families.
• Limit of collateral free lending to self-help groups would be increased from Rs 10 to Rs 20 lakhs.

V. Other components:

• Organised sector:
  • Employees’ Provident Fund Regulations will be amended to include Pandemic as the reason to allow non-refundable advance of 75 percent of the amount or three months of the wages, whichever is lower, from their accounts.
• Building and Other Construction Workers Welfare Fund:
  • Welfare Fund for Building and Other Constructions Workers has been created under a Central Government Act. There are around 3.5 Crore registered workers in the Fund.
  • State Governments will be given directions to utilise this fund to provide assistance and support to these workers to protect them against economic disruptions.
•  District Mineral Fund:
  • The State Government will be asked to utilise the funds available under District Mineral Fund (DMF) for supplementing and augmenting facilities of medical testing, screening and other requirements in connection with preventing the spread of CVID-19 pandemic as well as treating the patients affected with this pandemic.

Other measures

• The Reserve Bank of India (RBI) introduced relief measures to alleviate financial difficulties arising due to Covid-19 restrictions like moratorium on loans and EMIs, reduction in repo rate and reverse repo rate, reduction in cash reserve etc.
• Centre has made a provision of Rs 15,000 crore to strengthen the country's health infrastructure to tackle coronavirus.
• The Union Finance Ministry has announced slew of measures to ease compliance and statutory burden for individual as well as corporate.

• A task force has been set up to ensure that all steps to mitigate economic difficulties are effectively implemented.

Way forward

• The immediate priorities now should be in providing relief to the thousands of workers who remain stranded without food, shelter or money in cities and ensuring that the food and monetary allowances effectively each the beneficiaries.
• Due to this unprecedented crisis, the government should think of doing away with its fiscal deficit targets. It could issue a pandemic series of bonds to finance relief operations. This will not only act as a safe investment instrument in the midst of the stock market collapse but also help help control the depreciation of rupee in the market.