Nirmala Sitharaman Announces Measures For Farmers, Migrant Workers
Finance Minister Nirmala Sitharaman announced a second set of measures to ease economic crisis stemming from Covid-19, this time to provide relief to migrant workers, farmers and street vendors.
The steps are part of the Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi on Tuesday. The latest measures include:
- About 8 crore migrants who do not come under the National Food Security Act or aren’t beneficiaries in the state they are stationed will be provided 5 kilograms of grains per person and 1 kg chana per family per month for two months. This will cost the central government Rs 3,500 crore.
- A credit facility of Rs 5,000 crore will be started for 50 lakh street vendors within a month in which initial working capital of Rs 10,000.
- A scheme will be launched under PM Awas Yojana to provide affordable rented accommodation. Government-funded housing will be converted into affordable rental housing complexes under public-private partnerships.
- Credit-Linked Subsidy Scheme for middle income homebuyers extended up to March 2021, from March 2020 earlier. This is expected to benefit 2.5 lakh families, and lead to investment in housing of Rs 70,000 crore.
- To create job opportunities for tribals, and in urban, semi-urban and rural areas, the government will approve afforestation and forest management plans worth Rs 6,000 crore. This is an existing programme.
- Nabard will provide an additional refinance support of Rs 30,000 crore for emergency working capital funding that’s expected to benefit 3 crore small and marginal farmers.
- Concessional credit worth Rs 2 lakh crore will be provided to 2.5 crore farmers through Kisan Credit Cards.
- Extension of interest subvention and prompt repayment incentive on crop loans due from March 1 to May 31. About 25 lakh new Kisan Credit Cards will be sanctioned with a loan limit of Rs 25,000 crore.
- Current portfolio of Shishu loans under Mudra scheme will get interest subvention support of 2 percent for 12 months where maximum loan amount is Rs 50,000. This is expected to benefit 3 crore people, and cost Rs 1,500 crore to the government.
From March 2021, under the one nation, one ration card, migrant beneficiaries will be able to access Public Distribution System from any fair price shop in the country. About 83 percent of PDS population to be covered by August 2020, and 100 percent by March 2021. The is an existing programme and the process is underway.
Sitharaman also said enrollment under MGNREGA was 40-50 percent higher in May that a year earlier. Migrant workers returning home seeking work can enroll under the programme.
Chandrajit Banerjee, director general at industry lobby CII, said in a statement the availability of free food grains and concessional rental housing for migrant workers are expected to alleviate stress.
But KR Shyam Sundar, a professor at Xavier School of Management, Jamshedpur, questioned why the government could not provide income support to migrant workers considering they have been on streets since March 26.
Rs 16 Lakh Crore Done
The total size of the package based on today’s announcement will be Rs 3.16 lakh crore if investments worth Rs 70,000 crore due to the extension of credit linked subsidy scheme are factored in.
According to a report by Barclays Plc, the fiscal support announced by Sitharaman totalled to Rs 2.46 lakh crore, and considering the measures announced on Wednesday, the total support by the government would be Rs 8.4 lakh crore. This would mean that the government will announce additional measures worth Rs 4.25 lakh crore to meet the Rs 20 lakh crore target, assuming that all monetary steps including the farmer credit cards are part of the total package, the report said.
CARE Ratings said the government has so far announced measures worth Rs 16.04 lakh crore, and would announce additional measures worth Rs 3.96 lakh crore.
The actual fiscal impact of Wednesday’s announcements will be only Rs 11,000 crore, said the Barclays report authored by its Chief India Economist Rahul Bajoria. This would bring the total cost of additional incentives announced by the government to Rs 66,500 crore or 0.34 percent of GDP, and leave room for another 1.24 lakh crore of incremental spending, the report said.