The economic fallout of COVID-19

One for the poor: On Centre’s corona package

More than 50 days since a nationwide lockdown was announced by the Union government, it is clear that what was done as a public health measure to protect people from the COVID-19 threat has snowballed into a major economic crisis for the urban poor in general and migrant labour in particular. The travails of migrant workers have been well-documented. With loss of livelihoods, they have been pushed into penury in their places of work. And with the lockdown initially preventing inter-State travel, many have embarked on arduous journeys to their native places to get some support at a time of acute distress. In the second of a series of measures that are part of a ₹20 lakh crore economic package, Union Finance Minister Nirmala Sitharaman has tried to address the needs of these sections, apart from small farmers. She has recognised that migrant workers have taken to the Mahatma Gandhi National Rural Employment Guarantee Scheme in a major way after the Centre gave explicit instructions to reopen the scheme. As in the past, this remains a lifesaver for people dependent on fragile livelihoods, and the decision to extend it to the monsoon season is welcome. The government should also ensure that wages are paid without delays, a major problem with the scheme’s implementation lately. A waiver or at least an extension of the 100-day limit per household too would have helped. It is now up to the States to ensure the scheme is implemented properly.

For migrants who are still stationed in their places of work and who are not beneficiaries of the National Food Security Act or State schemes, the Finance Minister has promised 5 kg of foodgrains per person and 1 kg of channa per family per month for two months. This will bring the number of people receiving subsidised foodgrains close to the legal requirement of the National Food Security Act (67% of the population). It is a welcome relief for many starved workers, but the government could have extended the Public Distribution System coverage to include more people who are suffering from loss of jobs and livelihoods, besides migrant workers. Ms. Sitharaman also announced that the ‘one nation, one ration card’ scheme to allow migrants access any fair price shop across the country will be implemented by March 2021. But this scheme, as implemented now, has been utilised only sparingly by migrants, and concerns from States like Tamil Nadu where PDS is near-universal are yet to be addressed. Many of the announcements, including one for small farmers, are a combination of liquidity and credit-easing measures or the extension of existing schemes. As things stand, they fall short of the substantive fiscal measures that could stimulate demand in the economy. After all, that seemed to be the crux of the Prime Minister’s promise of spending ₹20 lakh crore.

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Printable version | May 17, 2021 10:21:55 AM |

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