Sitharaman’s ‘quick response’ to Modi’s coronavirus lockdown is a start – but much more is needed

Finance Minister Nirmala Sitharaman on Thursday made it clear that her ministry had not been taken into confidence about the nationwide lockdown to limit the spread of coronavirus that had been announced by Prime Minister Narendra Modi two days before. Never mind that Modi had himself called on Indians to carry out a self-imposed janata curfew a week before and expressly described it as a drill. Forget also that, by Sunday, it was clear that huge swathes of India would be going into complete lockdown.

Sitharaman described Modi’s Tuesday evening announcement of the national, three-week lockdown as if it were itself an unforeseen natural disaster that her ministry quickly stepped up to address. “We’ve immediately responded within 36 hours of the lockdown,” Sitharaman said, at a press briefing to announce a financial package of welfare services.

This is broadly what Sitharaman announced:

• 80 crore people, or 800 million, will get 5 kg of wheat or rice and 1 kg of pulses for the next three months, for free, over and above the 5 kg of wheat or rice that they already do. This can be collected in two instalments.
  
• The first payment of Rs 2,000 under the PM-KISAN, a farmer income support measure, will be front-loaded and sent in April.
  
• Wages under the National Rural Emploment Guarantee Act will be increased to Rs 202 per day from Rs 182.
  
• Rs 1,000 will be transferred in two instalments to senior citizens, widows and the disabled.
• A one-time transfer of Rs 500 per month for three months will go to 20 crore accounts of women in the Jan Dhan Yojana database.
  
• Below-poverty-line families will get free cooking gas cylinders for three months.
  
• Women self-help groups will be able to access Rs 20 lakh in collateral-free loans, up from Rs 10 lakh.
  
• The government will cover the entire Provident Fund contribution, including that of workers’ and employers, for certain categories for the next three months.
  
• Healthcare workers will be given Rs 50 lakh medical insurance.
  

Sitharaman claimed that the total cost of all of these measures would be Rs 1.70 lakh crore, although she did not provide the break-up of this figure nor explain how the amount would be budgeted.

Welcome welfare

India’s poor were always going to be hit hardest by this crisis, no matter how it went. If the virus spreads widely, the public healthcare system is simply unprepared to cope with the numbers and needs seen in other countries.

And even as the shutdown is aimed at preventing this eventuality, that has meant putting the lives of millions at risk, since they depend on daily wages and have a limited support system. Modi’s failure in his national address to properly explain how people are to even access food during the lockdown only added to the sense that this problem had not been carefully considered.

With that in mind, Sitharaman’s announcements – packaged as the Pradhan Mantri Garib Kalyan Yojana, the Prime Minister’s Welfare Scheme for the Poor – are welcome.

Providing much more in terms of free food, and in particular adding pulses, should go some way toward alleviating concerns about hunger, particularly since many state governments will also increase what they offer needy individuals. Sitharaman said nothing of how Indians will safely access this food in times of contagion, but hopefully the states will devise innovative methods.

The health insurance is a crucial move that gives some financial support to those who are on the front lines of the coronavirus battle. Hopefully the government will see fit to eventually include everyone whose work might expose them to infection, from sanitation workers to the police.

Underwhelming package

Some of the other measures are less heartening.

The NREGA wage increase would have happened anyway, and Sitharaman said nothing of how he will ensure that families that need the maximum number of work days – 100 – will actually get them. Sitharaman should have announced that the wages will go to those who, as per current rules, stay at home.

Rs 500 is a tiny amount to send to households per month. Instead of sending the money to those under the Jan Dhan Yojana, it might have been better targeted at those registered under NREGA, as they are often the neediest. When asked, Sitharaman seemed stunned at the idea that India may still have citizens who lack bank accounts – even though the numbers are in the tens of crores.

The self-help group loans tell us nothing at the moment, since even earlier this scheme was not fully utilised. While the contribution to the Employees’ Provident Fund is useful, Sitharaman said nothing about ensuring that employers do not fire their employees at this time.

Sitharaman’s “quick response” to Modi’s lockdown is both somewhat underwhelming and belated – it should have ideally been announced alongside the lockdown to alleviate people’s fears and reduce panic buying and migration.

But it is a start. Much more will need to come, including more details about how these schemes will be implemented in a way that people can access them without endangering their safety.

The government seems to be hoping that the effects of this economic downturn can be capped at three months, but it is already clear that it could potentially last much longer. Sitharaman is likely to move on to other efforts – particularly addressing the concerns of corporations and the markets. But the government should ideally return to this list and add much more in terms of welfare as the scale of the coronavirus challenge becomes clear.

Also read:

Coronavirus lockdown: 30 steps government should take to ease the suffering of the poorest Indians

Coronavirus: India can’t fight Covid-19 if millions don’t know anything about it

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