Amid lockdown, demand for cash transfers grows

Unorganised Workers’ Congress urges PM Modi to create a corpus of ₹1 lakh crore for the informal sector

With multiple cities and States announcing lockdown on Sunday in the wake of COVID-19, demand for economic relief package for the vulnerable sectors is growing from different quarters.

The head of the All India Unorganised Workers’ Congress, Arbind Singh, has written to Prime Minister Narendra Modi seeking to create a corpus of ₹1 lakh crore for the informal sector and offer direct cash transfers to the poor.

In a letter to Mr. Modi, Mr. Singh, who also heads the National Association of Street Vendors of India, urged the government to provide three months’ rations to 44 crore workers who work as domestic help, street vendors, brick making workers, Ola and Uber drivers, food delivery boys and those who are working with the hospitality industry.

The Congress’s wing for the informal sector workers also suggested ₹10,000 cash transfer for a month to deal with the disruption in their income sources.

‘93% of workforce’

“The informal sector workers constitute 93% of the workforce and the backbone of the economy. With the government emphasising social distancing and closure of markets, it is important for the policy initiatives to ensure that COVID-19 measures do not drive them to destitution,” Mr. Singh said.

CII proposal

In fact, a study conducted by the Confederation of Indian Industry (CII) has also mooted direct cash transfer of ₹10,000 to rural and urban poor to help increase consumer demand.

The industry body has urged the government to focus on key sectors such as tourism, hospitality, retail, civil aviation and Micro Small and Medium Enterprises (MSME) that are likely to be hit hard by the lockdown.

The government may consider a strong fiscal stimulus to the extent of 1% of GDP amounting to ₹2 lakh crore to be given in the hand of the needy citizens through Aadhaar-based Direct Benefit Transfer, the CII said.

“India has already been facing growth deceleration, with GDP growth having fallen to 4.7% in Q3 FY2020. The impact of COVID-19 is likely to pull it down further in the fourth quarter. GDP growth could slide to below 5% in FY2021 if policy action is not taken urgently,” the CII study noted.

“Fiscal and monetary stimulus measures need to be announced urgently,” said Chandrajit Banerjee, CII Director-General, in a statement while welcoming the Economic Response Task Force created by the Prime Minister.

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Printable version | Apr 2, 2020 2:44:19 AM |

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