FM announces Rs 1.7 lakh crore economic relief package

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In a move to provide relief and support the poorest citizens of the country who are the most vulnerable during the ongoing countrywide lockdown to curtail the spread of COVID-19, the Finance Minister of India, Nirmala Sitharaman announced a ₹1.7 lakh crore package, providing free food and cash transfers. She said the foodgrain ration for 80 crore poor people will be doubled for the next three months, supplemented by a kg of local pulses as well.

The Union Government will also provide ₹50 lakh medical insurance cover for the next three months for all “front line warriors” fighting the spread of the virus at personal risk, including ASHA (Accredited Social Health Activist) workers, medical sanitary workers in government hospitals, paramedics, nurses and doctors. The relief package ‘Pradhan Mantri Gharib Kalyan Yojana’ announced by the Finance Minister amid the nationwide lockdown, would take care of the needs of poor and migrant workers, farmers, women, pensioners, widows and the disabled.

“We do not want anyone to remain hungry, so we will be giving enough to take care of their foodgrain requirement, protein requirement in terms of pulses. On the other hand, they should also not remain without money in hand, so several measures through DBT are being taken so that money reaches them,” said the Finance Minister.

She added that over the next three months, each person who is covered under the National Food Security Act would get an additional five kg wheat or rice for free, in addition to the 5 kg of subsidised foodgrain already provided through the Public Distribution System (PDS). Besides, the beneficiaries will get one kg of pulse per household for free.

The relief package would benefit about 80 crore people and the vulnerable groups under the Pradhan Mantri Gharib Kalyan Yojna will also receive cash transfers — a mix of advances via existing schemes besides additional sums. In addition, over 3 crore poor pensioners above 60 years, widows, and disabled people would be given Rs. 1000 in two installments over the next three months. The 20 crore women holding Jan Dhan Yojana accounts would get Rs.500 a month over the next three months as well. The 8.3 crore poor households earlier received cooking gas connections under the Ujjwala scheme. They would now get free gas cylinders for the same period.

Moreover, wages were being hiked under the Mahatma Gandhi National Rural Employment Guarantee Act scheme, from ₹182 to ₹202 a day. The Minister said this would provide an additional ₹2000 a worker. She further promised the first installment of Rs. 2000 due to the land-owning farmers under the PM-KISAN income support scheme will be paid promptly in April which is the first month of the financial year.

EPF contribution is another important relief measure announced by the government. For small companies with 100 employees or less, of whom 90% earn less than ₹15,000 a month, the Centre will bear the cost of both employer and employee contribution (a total of 24%) to the Employees Provident Fund (EPF) for the next three months. This move will benefit 80 lakh employees and incentivise 4 lakh establishments. Further to provide relief to all 4.8 crore organised sector workers registered under the EPF, the scheme’s regulations will also be amended to allow the non-refundable advance of 75% of the amount standing to the credit of the member, or 3 months worth of wages, whichever is lower. Collateral free loans provided for women’s self-help groups under the National Rural Livelihood Mission are being doubled to ₹20 lakh, potentially benefiting seven crore households.

The Centre is directing the States to use the ₹31,000 crore sitting with the Building and Other Construction Workers Welfare Boards to provide support to the 3.5 crore workers registered under the scheme. The States can also use the money available under district mineral funds for medical screening, testing and treatment.

The United States of America (USA) on the other hand, announced a massive $2 Trillion Coronavirus Stimulus package for Americans. The American Senate has passed the bill that includes direct $1,200 cash payments to many Americans; $150 billion to help the healthcare industry; $500 billion for state and local governments and companies; and $350 billion in loans and assistance for small businesses. Further, the Treasury Department of America will create a fund worth $500 billion or more to assist local and state governments and industries hit by the pandemic. The Treasury will also make $46 billion in direct financial assistance, including $25 billion to airlines, $17 billion for national security, and $4 billion for cargo.

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