Indian finance minister Niramla Sitharaman announced an economic package of INR 1.75 trillion (about US$23 billion at 1 USD = INR 75.4 exchange rate) today to address the impact of COVID-19 on the economy. It is mostly augmentation of existing social protection measures. It is tagged as ‘Pradhan Mantri Garib Kalyan Package’. The package amounts to 0.9% of GDP (FY2020RE) and includes:
- Insurance scheme for healthcare workers fighting COVID-19 in government hospitals and healthcare centers
- EPF payment of employees who earn less than INR 15,000 per month and work in companies with less than 100 employees
- Cash transfers:
- Each farmer gets INR 2000 in April 2020 as an advance installment from PM-KISAN scheme (total INR 16,000 crores or US$2.13 billion). [Each farmer owning a land gets INR 6,000 per year under the scheme]
- INR 31,000 crore (US$ 4.12 billion) under PMJDY women account-holders (INR 500 per month for the next three months)
- INR 13,000 crore (US$ 1.73 billion) worth of cooking gas cylinders to 80 million households for the next three months (one each month)
- INR 5,000 crore (US$ 0.66 billion) to prevent job losses in organized sector (govt to pay 24% of monthly wages into their PF accounts for the next three months)
- INR 3,000 crore (US$ 0.4 billion) for senior citizens (INR 1000 per month for the next three months to about 30 million aged widows and people in Dviyang category)
- Food subsidy:
- INR 40,000 crore (US$ 5.31 billion) to double entitlements of food grains (5 kg rice extra) for the next three months to 800 million people
- INR 5,000 crore (US$ 0.66 billion) to provide one-kilogram pulses per family for the next three months
- Employment protection: INR 5,600 crore (US$ 0.74 billion) to cover increase in MNREGA wages (by INR 20 with effect from 01 April 2020) to benefit 136 million households. Wages per day will now become INR 202.
- Other measures
- Allow non-recoverable advance of 75% of amount or three months of wages from EPF accounts. 40 million registered families to benefit from this
- Collateral free loans of INR 2 million (up from INR 1 million) to women organized 6.3 million self-help groups
These measures are on top of the previously announced measures to help the business sector (mostly compliance relief) and state-specific measures.
