Finance Minister has announced a fiscal stimulus for the people impacted most during the lockdown as they face large financial crunch. This amounts to total of Rs.1,70,000cr that is approximately 1.7% of GDP.
Details of the Package are below
PM Ann Yojana - Food Security
Over the current 5Kg rice/wheat that ration card holders receive an additional of 5kg of rice/wheat per month for next 3months along with 1kg of regional preferred pulses will be given.
Direct Benefit Transfers -
Farmer - Already get 6000/year . This will be front-loaded by Rs.2000 in first week of April.Benefits 8cr farmers.
MNREGA - Wage increase from Rs. 182 to Rs. 202/day, it will add income of Rs. 2000 per family. Benefit 5cr families.
Old Aged/Widows /Physically disabled - One Time of Rs.1000 in 2 installment over next 3 months. Benefits 3cr individuals.
Jan Dhan Yojana (Women Only) - One Time of Rs 1500 in 3 installments over next 3 months. Benefit 20cr individuals.
Ujjwala Yojana (Women Only) - Free Gas cylinders for next 3 months. Benefits 8cr families.
Self Help Groups - Increased collateral free loan limit from Rs.10lakhs to Rs.20lakhs per SHGs. Benefits 7cr families via 63 lakh SHGs.
a) Government will pay EPF contribution of Employer and Employee(24%) for next 3 months for the establishment with up to 100 employees and 90% employee earning less than Rs.15000 per month. Benefits 80 lakh employees and 4 lakh establishments.
b) EPFO regulations will be amended to allow non-refundable advance to 75% of fund or 3 Months of contribution whichever is lower. Benefits 4.8cr workers registered.
Construction Workers - Welfare Fund for building and construction workers have 3.5cr registered workers with corpus of Rs.31000cr via State instructions.
District Mineral Fund - Corpus to be used for medical activities and to keep check in spread of the virus via State instructions.
We believe this is a well-diversified distribution of stimulus in terms of what is been given and to whom it is been given. The overall amount is sufficient in terms of Central government support along with various schemes already announced by various State governments. Though the spread of cash transfer is over next three months and puts the strain on the receiver’s disposable funds.
This is much needed relief for the large population that has faced a cash crunch since the lockdown has started.