Finance minister Smt.Nirmala Sitharaman has announced a comprehensive economic package on Thursday, 26th March, in order to deal with the impact of coronavirus outbreak in the country. She has stated that the government has planned a Rs 1.7 lakh crore relief package, in the name of The Pradhan Mantri Garib Kalyan Yojana, to provide basic needs for people who have hit the hardest by the Covid-19 lockdown. There will also be a provision of insurance cover for the frontline medical personnel.
The lockdown is for 21 days starting from March 25th and during this time period, close to 800 million people will be receiving free cereals(5 kg of wheat/rice per person will be given for next three months on top of the 5 kg that they already receive and 1 kg of pulse per household), cooking gas (Ujjwala Scheme)and cash through direct transfers in order to cope up with the lockdown.
Nirmala Sitharaman had already conducted a meet this Tuesday, 24th March, and announced that the timeline for filing income tax returns will be relaxed. The finance minister is bringing out various measures possible to keep the impact of the deadly virus low. She had told“…will gradually address if there’s more to attend to,” while talking about a stimulus plan for companies.
“We’ve immediately responded within 36 hours of the lockdown. We’ve first reached out to the poorest of the poor, who need help,” said the minister, but didn’t disclose the ways by which it will be funded. She has also announced Rs 50 lakh per person as insurance for frontline warriors such as doctors, nurses, sanitation, ASHA or government workers. The Health insurance cover termed by Garib Kalyan Anna Yojana will be based on direct benefit transfer.
The announcement by the finance minister has received positive feedback from industry and experts. The State Bank of India chairman Rajnish Kumar has commented that “It’s a very well-defined package, reinforcing government’s intent that no one should be deprived of basic facilities in today’s stressed times,” He further added that, “We are hopeful of more calibrated responses in coming weeks as the impact of the pandemic unfolds.”
Sectors such as tourism, hospitality, automobiles and aviation, besides micro, small and medium enterprises (MSMEs), are having huge losses in their businesses as the cash flows are reduced to a great extent. But they cannot avoid to tax and statutory payments. The Confederation of Indian Industry director general Chandrajit Banerjee has stated that “We hope that the RBI will soon bring in relief measures for distressed businesses including a moratorium on debt repayments and redefinition of non-performing assets,”.
The finance minister also announced that Widow/senior citizens and Ex-gratia will be given Rs 1,000 in two installments. She also stated that the workers will now be able to withdraw up to 75% from the PF funds (non-refundable advance) or three months of wages (whichever is lower), and the Centre directed state governments will spend Rs 31,000 crore from the fund to provide relief for the impact of lockdown because of Corona outbreak.
The finance minister has told that these measures and allocations will be done on an “immediate” basis in order to reduce the impact intensity.