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Mainstream, VOL LVIII No 16 New Delhi, April 4, 2020

Lockdown: Meaning and Meaninglessness of FM’s Package

Saturday 4 April 2020

by Sudipta Bhattacharyya

Finance Minister Nirmala Sitaraman in her press conference on 26.03.20 declared a relief package owing to Corona. However a close scrutiny of the package reveals that the majority of the announcements are centered on financing the old and running projects. In some cases there is no need for financing. Let us look first the newly declared projects and then the old projects.

Newly Declared Projects 

Project-1: The poor people will be given through PDS 5 kg of rice or wheat per capita per month and 1 kg of pulses (dal) per family per month for next three months.

Reality: Since the liberalization policy was implemented in early nineties the targeted PDS system was introduced dismissing the hitherto existed untargeted PDS. Under the targeted PDS a big proportion of the poor people had been excluded as they could not mange to have BPL cards penetrating the bureaucratic machinery and red-tapism. They are no more treated as poor by the state. The relief does not bear any meaning to their life. Secondly, P. Sainath raised the question that apart from this free ration, whether the usual ration will also be given at free of cost. If not where from the people get money to buy their usual ration in the midst of this crisis. Thirdly, there is no problem to get the required stock of rice and wheat from Food Corporation of India’s reserve. But FCI does not collect pulses. Then where from the government can collect so much of pulses (approximately 5 lakh tons) in the midst of the lockdown. Fourthly, how come this huge amount of rice, wheat and pulses can be transported from the godown to ration shop within the lockdown? What would be the cost of transportation? Whether the transported tracks will be looted in the middle of the way by the hungry people?

Project-2: Gas cylinders will be delivered for three months to poor families under Ujwala Scheme.

Reality: The question of cooking arises after ensuring supply of food to households. Former Union Agriculture Secretary Siraj Hussain remained skeptical about the success of this project as the poor customers did not regularly pick up their cylinders.

Project-3: Pensioners senior citizens, widows and handicapped will get total Rs.1000 in two instalments, while 20.8 crore female members with Jan Dhan Account will get Rs.500 in each month in three consecutive months.

Reality: The amount of pension at present is only Rs.200 as it has never been revised. Without its revision mere Rs. 500-1000 as a tokenism is utterly inadequate. Jayati Ghosh and P. Sainath opined that these were ‘insulting’ and ‘obscene’. Moreover, when the entire population is merged in hunger, mere assistance to only female members is discriminatory.

Project-4: All the health workers related to Corona care being undertaken under a health insurance scheme of Rs.50 lakh for three months. That means if any health worker will be ill in next three months he will be benefitted with maximum 50 lakh rupee.

Reality: Therefore this amount of money has also been kept for possible illness. If a health worker will not be ill from any disease he or she will not get any money. There was no mention about premium, time scale and cost. Even there is no mention about the company that has been assigned the job of health insurance and at what condition.

Announcement of Old Running Projects in the name of Relief Package

Project-5: Finance Minister announced that the wage rate under Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) would be increased from by Rs.20/- (from Rs.182 to Rs.202 per day) and the this incremental wage for 100 days (20 X 100 =) Rs.2000 would be transferred into the bank account of the workers at the earliest.

Reality: This is not any special assistance by the government at the lockdown situation. This is an old project, the wage rate of which is being revised in every April. Therefore the minuscule amount cannot be any charity on behalf of the government. Secondly, the increased wage rate Rs.202 is lower than the MGNREGA wage rate prevail in 29 states. For example the wage rate of Haryana and Kerala are Rs.309 and Rs.291 respectively. Only six states can be benefited from the slight increase in wage rate. Ironically, when Nirmala Sitaraman announced about the incremental wage under the MGNREGA for the next financial year, one can see that Rs.1800 crore is still unpaid by the government that may be materialized soon due to Corona. Fourthly, in order to implement the social distancing, many state governments stopped MGNREGA for indefinite period, where the issue of hike in MGNREGA wage rate is completely irrelevant.

Project-6: PM Kishan Scheme total Rs.6000 be given at the rate of Rs.2000 per month in next three months.

Reality: This is also sanctioning of money in an old and running project and to confuse it with the special package following lockdown is a kind of lie. Everything that would be started since April 2020 had been ensured in the Budget for 2020-21. What Finance Minister did not spell that last in two financial years her government could not spend more than 40% (almost Rs.40000 core) of budgetary allocation in the project.

Project-7: The employees in organized sector can draw 75% of total money in Provident Fund (PF). The same money need not be deposited further.

Reality: Only Nirmala Sitaraman knows how come the PF drawing limit can enter in the relief package. The employees would draw their PF money and the government can save the interest money they would have to otherwise pay.

Project-8: The Self Help Groups (SHGs) operated by female members so far could lend maximum of Rs.10 lakh rupee to its members. Now they will be allowed to give loan maximum of Rs.20 lakh rupee. In this way it is claimed that 7 crore women will be benefited.

Reality: The poor women will take high interest loan from microfinance institutions and this has been included as a component of relief package. This is a big joke for the government to expose their village moneylender character before the people.

Project-9: The Finance Minister instructed state government and union territory to use unspent money of Rs.31000 crore accumulated in welfare scheme through mandatory Cess. She instructed to remit the money in the bank account of the workers.

Reality: The Secretary of the All India Construction Workers Federation V. Shashikumar informed that in India there are total 6 crore construction workers. Of them, Nirmala Sitaraman only refers about 3.5 crore of registered workers. There is no mention of time period within which the money will be spent. Needless to say this is also an accumulated excess unspent fund and should not be included within 1.7 lakh crore relief fund.

No Announcement on Migrant Labourers particularly stranded due to Lockdown 

The Prime Minister without having any preparation declared lockdown at 8 pm on 24.03.20. The last resort of food and roof was denied from 12 pm. The ways to back home for migrant workers were closed. Long away from home they mobilized in the bus stand with a thin hope for getting any bus for home. The social distance norm were severely violated at Delhi bus stand by the migrant workers desperate to back home. At last they started walk for home 200/400 km off with wife children and the luggage at back. So far 22 migrant workers died either by accident, or illness or hunger. Nirmala Sitaraman did not utter a single word for them, not even for workers in general. However on 29th March central government ordered complete ban on the movement of migrant workers and instructed state governments and union territories to seal state and district borders. Most surprisingly the central government squarely put all the responsibilities of fooding and lodging of migrant workers on the shoulder of the state governments. However, before this announcement the governments of Kerala and Delhi took all responsibilities of the migrant workers on their own.

Then what is the final audit of 1.7 lakh crore?

Let us accept the claim of 1.7 lakh crore of relief packages on face value. Even then this amount is just 0.8 per cent of the GDP. The same regime of central government waived Rs.6 lakh crore bank loans of 20 corporate houses.

Notwithstanding, it is now very difficult to get the proper audit of 1.7 lakh crore. Nirmala Sitaraman did not place any list wise planned expenditure. If we add up all newly introduced projects (i.e. Project-1 to Project-4) it gives at most Rs. 1 lakh rupee. The remaining Rs.70 thousand crore can be a big manipulation as claimed by an online Bengali magazine, Guruchandali (www.guruchandali.com/comment.php?topic=17259). In this crisis situation this is a great bluff of the Modi government.

After passing 5 days since the announcement of Nirmala Sitaraman, the ration shop had opened on 1st April, 2020. People grossly violated all the norms of social distancing and jumped at the ration shop. In most shops the assured rice, flour, dal is missing. This may again direct the entire country into greater anarchy in the midst of Corona nightmare. Meanwhile in the social media a video became viral where it is seen that the hungry people looted flours from a track halted at signal. It reminds us a line of a Bengali poem of Amiya Chakraborty, ‘The catastrophe never halts even if you are blind’.

Sudipta Bhattacharyya is Professor, Dept of Economics and Politics, Visva-Bharati, Santiniketan

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