oVID-19 has sent a chill down the spine of every individual, regardless of who or where s/he is. The disease has hit 175 nations. Some of the most advanced countries in the world, such as the US, Italy, Spain, Germany, France and the UK, with the best of health infrastructure, have recorded the highest casualty. Nearly 5 lakh people have been affected by the coronavirus. The global toll is past 22,000 now. The economic impact of the disease can be calamitous. All major economies in the world have come out with long-term economic measures to fight the fallout of the pandemic. Earlier this month, the US Federal Reserve cut rates by a record 1 per cent to make loans available to people at cheaper rates. There is talk that the Fed may again cut rates to bring it down to zero. UK, France, China, Japan and Germany, among others have declared economic stimulus to fight the impact of CoVID-19. In such scary times, all eyes were fixed on Finance Minister Nirmala Sitharaman who kept on promising a ‘sooner than later’ stimulus package. The government took a very long time in announce a package, and finally when it came, it disappointed one and all.
The government has set aside a humongous Rs 1.7 lakh crore under the Prime Minister’s Garib Kalyan Yojana. Under this, it has given away ‘doles’ of up to Rs 2,000 to every beneficiary. For farmers, an instalment of Rs 2,000 has been frontloaded out of his Rs 6,000 due under the PM-KiSAN scheme. For
MGNREGA job-card holders, daily wage has been hiked from Rs 182 to Rs 202. This amounts to Rs 2,000 per year for 100 days of work, and works out to Rs 167 per month — a ridiculous Rs 5.47 per day. For pensioners and the disabled, Rs 1,000 in two instalments. For women with Jan Dhan accounts Rs 1,500 in three months. Three free gas-filled cylinders to every Ujjwala beneficiary in as many months. Collateral-free loans of up to Rs 20 lakh to SHG women, something banks will be very reluctant to comply with. The government will pay for three months both employee and employer contributions to EPF — but there are too many riders attached with this. A lollypop for PF holders is that they will be allowed to withdraw 75 per cent of their own money, or three months of their wages, whichever is lower. Finally, state governments have been given a ‘direction’ to help building and construction workers with the Rs 31,000-crore welfare fund created for them. Under the food category, an additional 5 kg of cereals and one kg of pulse will be given to people under the National Food Security programme. The only benefit of substance announced today by the FM was the Rs 50 lakh medical insurance cover extended to 20 lakh doctors, paramedics and ASHAs engaged in the fight against CoVID-19. However, considering the amounts of risk they are exposed to, this amount is also not too big.
The above measly amounts are just breadcrumbs thrown to the poor. The package has no vision. There is nothing for the economy of the country. None of the announced schemes benefit any industry or sector. There is nothing for the 50 crore middle class taxpayers — no benefit to them in terms of deferred EMIs or interest subvention. The FM Tuesday had come out with some sops, but these again were peanuts only. There was zero benefit for taxpayers beyond the fact s/he got an extra 90-day window to file returns. The ATM fee waiver was ridiculous and is way out of proportion with the grave crisis that people are faced with. Already, some new-generation private banks are offering this service. Moreover, in the age of digital banking and with people having multiple bank accounts, the ATM fee has long ceased to be a botheration for many. In the first case, it was wrong on the part of banks to impose such fees. Therefore, instead of ending this for good, the FM has given a three-month waiver only. This government has always been late in responding to hazards, economic and otherwise. Let alone taking preventives, it has a habit of refusing to even acknowledge the existence of a problem. It had done this with regard to economic recession which it has repeated now. The hope now shifts to the Reserve Bank of India, which is scheduled to meet April 3 for its monetary review. We hope the bank will deliver a cut between 50 basis points and 100 basis points to cushion the lending ecosystem. The breadcrumbs will not do.