Centre a scrooge with cash transfers
Finance minister Nirmala Sitharaman on Thursday unveiled the second tranche of the Narendra Modi government’s stimulus package, which again showed the Centre could be big and bountiful with numbers but a scrooge with cash transfers.
Migrant workers, day labourers, street vendors and farmers — near-destitute after the prolonged lockdown —had been pinning their hopes on a cash dole to bail them out of the economic crisis wrought by a raging pandemic.
Instead of forking out money into their Jan Dhan accounts, the Modi government promised them free grain for two months, a pan-India ration card, and subsidised loans that they may not have an appetite for as they struggle to bring their lives back on track.
The Rs 3.16-lakh-crore fresh package of measures showed just how out of touch with reality the Modi government had become.
The measures included a first-of-its-kind affordable rental housing for urban migrants and a credit-linked subsidy to buy homes that the finance minister said she was extending to the “lowest rung” of India’s middle class — people earning between Rs 6 lakh and Rs 18 lakh a year. The subsidy scheme, introduced in May 2017, has now been extended by another year.
Street vendors who lost their livelihoods during the lockdown have been offered an initial working capital of Rs 10,000 within a month through a special Rs 5,000-crore credit facility. They have been promised monetary rewards if they make digital payments and greater credit if they display “good repayment behaviour”.
Sitharaman said 50 lakh street vendors would benefit from the scheme. But it wasn’t clear from where the government had sourced this figure, which looked like an underestimate.
Farmers were advised they would be able to access crop loans through an emergency working capital fund of Rs 30,000 crore that was being extended to the National Bank for Agriculture and Rural Development (Nabard).
“These are medium-term solutions…. What we need to do is put money in the pockets of people in the immediate term,” said N.R. Bhanumurthy of the National Institute of Public Finance and Policy.
Sitharaman said 67 crore ration cardholders, or 83 per cent of those covered under the Public Distribution System, across 23 states would be covered by the national portability (one nation, one ration card) scheme within three months or by August. The government hopes to achieve 100 per cent national portability by March 2021.