pradhan mantri garib kalyan package · battle against corona virus relevant for gs prelims &...

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1. Finance Minister announces Rs 1.70 Lakh Crore relief package under

Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the

battle against Corona Virus

Relevant for GS Prelims & Mains Paper III; Economics

The Union Finance & Corporate Affairs Minister Smt. Niramla Sitharaman today announced

Rs 1.70 Lakh Crore relief package under Pradhan Mantri Garib Kalyan Yojana for the poor

to help them fight the battle against Corona Virus.

Following are the components of the Pradhan Mantri Garib Kalyan Package: —

PRADHAN MANTRI GARIB KALYAN PACKAGE

I. Insurance scheme for health workers fighting COVID-19 in

Government Hospitals and Health Care Centres • Safai karamcharis, ward-boys, nurses, ASHA workers, paramedics, technicians, doctors

and specialists and other health workers would be covered by a Special insurance Scheme.

• Any health professional, who while treating Covid-19 patients, meet with some accident,

then he/she would be compensated with an amount of Rs 50 lakh under the scheme.

• All government health centres, wellness centres and hospitals of Centre as well as States

would be covered under this scheme approximately 22 lakh health workers would be

provided insurance cover to fight this pandemic.

II. PM Garib Kalyan Ann (अन्न) Yojana • Government of India would not allow anybody, especially any poor family, to suffer on

account of non-availability of foodgrains due to disruption in the next three months.

• 80 crore individuals, i.e, roughly two-thirds of India’s population would be covered under this scheme.

• Each one of them would be provided double of their current entitlement over next three

months.

• This additionality would be free of cost.

Pulses: • To ensure adequate availability of protein to all the above mentioned individuals, 1 kg per

family, would be provided pulses according to regional preferences for next three months.

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• These pulses would be provided free of cost by the Government of India.

III. Under Pradhan Mantri Garib Kalyan Yojana,

Benefit to farmers: • The first instalment of Rs 2,000 due in 2020-21 will be front-loaded and paid in April

2020 itself under the PM KISAN Yojana.

• It would cover 8.7 crore farmers

IV. Cash transfers Under PM Garib Kalyan Yojana:

Help to Poor: • A total of 20.40 crores PMJDY women account-holders would be given an ex-gratia of Rs

500 per month for next three months.

Gas cylinders: • Under PM Garib Kalyan Yojana, gas cylinders, free of cost, would be provided to 8 crore

poor families for the next three months.

Help to low wage earners in rganized sectors: • Wage-earners below Rs 15,000 per month in businesses having less than 100 workers are

at risk of losing their employment.

• Under this package, government proposes to pay 24 percent of their monthly wages into

their PF accounts for next three months

. • This would prevent disruption in their employment.

Support for senior citizens (above 60 years), widows and Divyang: • There are around 3 crore aged widows and people in Divyang category who are

vulnerable due to economic disruption caused by COVID-19.

• Government will give them Rs 1,000 to tide over difficulties during next three months.

MNREGA • Under PM Garib Kalyan Yojana, MNREGA wages would be increased by Rs 20 with effect

from 1 April, 2020. Wage increase under MNREGA will provide an additional Rs 2,000

benefit annually to a worker.

• This will benefit approximately 13.62 crore families.

V. Self-Help groups:









• Women organised through 63 lakhs Self Help Groups (SHGs) support 6.85 crore

households.

a. Limit of collateral free lending would be increased from Rs 10 to Rs 20 lakhs.

VI. Other components of PM Garib Kalyan package

Organised sector: • Employees’ Provident Fund Regulations will be amended to include Pandemic as the reason to allow non-refundable advance of 75 percent of the amount or three months of the

wages, whichever is lower, from their accounts. • Families of four crore workers registered under EPF can take benefit of this window.

Building and Other Construction Workers Welfare Fund: • Welfare Fund for Building and Other Constructions Workers has been created under a

Central Government Act.

• There are around 3.5 Crore registered workers in the Fund.

• State Governments will be given directions to utilise this fund to provide assistance and

support to these workers to protect them against economic disruptions.

District Mineral Fund • The State Government will be asked to utilise the funds available under District Mineral

Fund (DMF) for supplementing and augmenting facilities of medical testing, screening and

other requirements in connection with preventing the spread of CVID-19 pandemic as well

as treating the patients affected with this pandemic.

Source: PIB

2. ‘WHO’s underfunding hits global disease response’

Relevant for GS Prelims & Mains Paper II; IOBR

Robert Yates is an internationally recognised expert on universal health coverage and

progressive health financing, who has previously worked as a senior health economist with

the World Health Organisation. He speaks to The Indian Express:

Do most big public health plans stem from large crises?

It is definitely true that many of the world’s most significant and successful universal health coverage reforms have followed, and been a consequence of major crises. Good examples

include the UK, France and Japan after World War II, Thailand after the Asian financial

crisis, China after the 2002 SARS crisis, and even Rwanda after the 1994 genocide.









To what extent does the underfunding of bodies like the WHO impact global

information-sharing on disease?

This crisis has once again put the spotlight on the underfunding of global health bodies like

WHO which is limiting their ability to coordinate the global response including the sharing

of information across national boundaries. In September 2019 the Global Preparedness

Monitoring Board Report recommended that Member states need to agree to an increase in

WHO contributions for the financing of preparedness and response activities and must

sustainably fund the WHO Contingency Fund for Emergencies, including the establishment

of a replenishment scheme using funding from the revised World Bank Pandemic

Emergency Financing Facility. Looking to the future, it is vital that governments heed this

recommendation and the other ones outlined in the GPMB report.

Poor countries do not have the money to make public health a top priority, many

governments say.

I don’t agree with this. The amount that governments spend on public health, health systems, and health in general is a political choice weighed up against other priorities.

Some countries choose to spend a higher proportion of their GDP through public health

financing than others, and in many instances have increased public spending quite

dramatically. China did for example, after the SARS epidemic in 2002. There are though, a

number of countries that demonstrably give a low priority to public health spending, and

regrettably that includes India.

Could something good and useful emerge on the other side of this pandemic?

Yes, I hope this terrible tragedy will be a wake-up call that the world collectively needs

truly global universal health coverage whereby everyone on the planet receives the quality

health services they need without suffering financial hardship. This clearly means access to

and use of public and preventive health services to stop outbreaks becoming epidemics,

and also curative, rehabilitative and palliative care services for those who become sick.

This can only be achieved through publicly financing the health system so that the healthy

wealthy subsidise the sick and the poor. And there are already signs of some countries

recognising that they do need to socialise their health financing systems more (e.g., Ireland,

Spain, South Africa) to tackle this epidemic and this may also happen in countries like India

and America as well, which have become dominated by inequitable private financing. So

hopefully in the long run, responding to this epidemic will take the world closer to the SDG

goal of universal health coverage.

Source: The Indian Express









3. For poor households and small businesses, today’s crisis is a crisis of liquidity. The nationwide lockdown has cost daily wage workers and

informal sector entrepreneurs their opportunity to earn. To what extent

can the government’s package alleviate their distress?

Relevant for GS Prelims & Mains Paper III; Economics

For economic agents – particularly poor households and small businesses – the crisis today

is a crisis of liquidity. The nationwide lockdown, imposed to stop the novel coronovirus in

its tracks, has led to scores of daily wage workers and informal sector entrepreneurs losing

earning opportunities from their existing activities.

On Thursday, Finance Minister Nirmala Sitharaman announced a Rs 1.70 lakh crore ‘Pradhan Mantri Garib Kalyan Yojana’ relief package to alleviate the distress of those least equipped to bear the cost of staying at home for the larger public interest of battling the

COVID-19 pandemic.

The Indian Express examines the effectiveness of the package in meeting its stated goal.

In the current situation, which is the most significant component of the Rs 1.70 lakh

crore Pradhan Mantri Garib Kalyan Yojana relief package announced by Finance

Minister Nirmala Sitharaman on Thursday?

The increased entitlement of foodgrains supplied through the public distribution system

(PDS) is a major intervention. A typical poor household having five adult members

consumes 50-55 kg of cereals and 4-5 kg of pulses every month. Currently, the PDS

provides 5 kg of cereals per person per month at Rs 2/kg and Rs 3/kg for wheat and rice,

respectively. That is 25 kg for a family of five.

Under the package, an additional 5 kg of wheat or rice would be given per person per

month, free of cost. The doubling of entitlement, effective for the next three months with the extra grain coming free, will practically meet the family’s entire cereal requirement. Roughly 80 crore persons or two-thirds of India’s population covered under the National Food Security Act will benefit. These poor or lower middle-class sections, impacted most by

the lockdown, will no longer need to buy any wheat or rice from the market. Further, they

will receive 1 kg of pulses per family per month, again free of cost for the next three

months. That would meet 20-25% of their total requirement.

How much will all this cost? And how effective will it be on the ground?

The effectiveness will be more in states with well-functioning PDS. That is, Kerala, Tamil

Nadu, Chhattisgarh and Odisha — but not Uttar Pradesh or Bihar. The Food Corporation of

India (FCI) in 2019-20 has incurred an expenditure of Rs 26.80 for procuring and

distributing every kg of wheat, and Rs 37.48 per kg of rice. At an average economic cost of









Rs 30/kg, 80 crore persons being provided 15 kg each of free grain (over three months)

would translate into an additional outgo of Rs 36,000 crore.

But there are savings as well. The economic cost does not include the FCI’s expenses in holding and maintaining excess stocks in its godowns. This “carrying cost” — basically

interest and storage charges — is estimated at Rs 5.61 per kg in 2019-20. On 12 million

tonnes (mt) of grain — which is what 15 kg for 80 crore people would be — that works out

to over Rs 6,700 crore. The net outgo for the exchequer will then be well under Rs 30,000

crore. Even after adding Rs 4,000 crore towards giving 3 kg of pulses free to 20 crore

families — the estimated economic and carrying cost here is Rs 60-70 per kg — the total

outgo will not exceed Rs 35,000 crore. And given that FCI and the National Agricultural

Cooperative Marketing Federation of India are now holding some 77.6 mt of cereals (3.5

times more than required) and 2.2 mt of pulses respectively, this is also an effective way to

dispose of excess stocks.

What is the other substantial relief measure announced?

Sitharaman has said that LPG gas cylinders would be distributed free to 8 crore poor

families for the next three months. Taking an average non-subsidised cylinder price of Rs

800 and three cylinders each over three months for these families, the financial cost will be

Rs 19,200 crore. But it is also worth bearing. The least that the government can do for those

worst hit by the lockdown is to secure their basic dal, roti and cooking fuel requirement.

Will enhancing daily wages under MNREGA by Rs 20, from an average of Rs 182 to Rs

202, help? Not really, in a lockdown, where there’s little scope to undertake MNREGA works. In today’s context, all MNREGA households — a total of 13.65 crore job cards have been

issued, of which 8.22 crore are active — should ideally be given an unemployment

allowance. The Finance Minister has claimed that the Rs 20 wage rate hike will result in an

additional income of Rs 2,000 per household. This is a theoretical calculation, assuming all

job card holders are provided 100 days of guaranteed wage employment under the scheme.

When daily wage earners are supposed to remain at their homes, the only way to

compensate them under MNREGA is through unemployment allowance. The onus for

paying that under the Act is, however, on the state governments. It is unlikely they would

make the necessary budgetary provision.

The relief package also seems to have cash transfer components.

Yes, but not very substantial. A total of 20.4 crore of bank accounts belonging to women

under the Pradhan Mantri Jan Dhan Yojana are to be credited Rs 500 each per month for

the next three months through direct benefit transfer (DBT). That is hardly any

recompense for those forced out of work. Nor is payment of Rs 2,000 to 8.7 crore farmers

under the Pradhan Mantri Kisan Samman Nidhi anything to write home about. Farmers are

already receiving an annual income support of Rs 6,000 under this scheme, with the first

installment payment of Rs 2,000 for 2020-21 anyway due in April. There’s no additional









financial implication here — at a time when farmers are facing both lower crop prices due

to a coronavirus-induced market collapse, and higher harvesting costs on account of labour

shortages from the lockdown.

What does the package really amount to?

The main problem for poor and vulnerable households today is liquidity stress. Unlike big

businessmen or the salaried middle class, these are people with no balance sheets, reserves, or bank balances. Every day’s loss of work for them means cutting down even basic consumption and going deeper into debt. Free grain can help, but does not address

the real crisis, which is of liquidity. They need cash to buy essential things other than just

food — and most of them had it till the other day.

Source: The Indian Express

4. Trump’s inadequate response

Relevant for GS Prelims & Mains Paper III; Science & Technology

On January 20, both South Korea and the U.S. reported their first case of the novel

coronavirus. Two months later, while South Korea has largely contained the spread, the

U.S. is grappling with an exponential increase in the number of cases. On March 26, with

69,197 cases, U.S surpassed Spain (49,515) to have the second highest case load outside mainland China. Now it is inching closer to Italy’s case load of 74,386. On the other hand, South Korea has reported 9,241 cases, six times fewer than the U.S.

A tale of two countries

The difference in availability of reliable testing kits in large numbers is mainly why there is

such a striking difference in case load in these two countries. While South Korea approved

the first coronavirus test on February 7, when there were just a few cases, the U.S.

floundered. In early February, the Centers for Disease Control and Prevention (CDC)

distributed about 1,60,000 testing kits to labs across the country. However, only about 200

of them were used. In February, testing was stalled due to various problems. The narrow

criteria for testing suspect cases also made it extremely difficult to identify the silent

spread of the virus in the community. It was only on February 27 that CDC expanded the

criteria allowing doctors to test hospitalised patients with symptoms compatible with

COVID-19 as well as other vulnerable populations.

When tests weren’t available and the testing criteria remained narrow, U.S. President

Donald Trump did nothing to get the tests from the World Health Organization or allow

companies to produce them. Instead, he lulled people into believing that the virus spread

was under check. Unfortunately, the top priority for Mr. Trump does not seem to be public

health but the stock market and his re-election prospects.









On January 22, when the WHO was meeting to decide if the SARS-CoV-19 outbreak was a ‘public health emergency of international concern’, Mr. Trump said in an interview, “We have it totally under control”. He reiterated this on several occasions. On March 9, when the number of cases in the U.S. crossed 500 and the number of deaths rose to 22, Mr. Trump

tweeted that the SARS-CoV-2 “risk is low to the average American”. To make matters worse, he appointed Vice President Mike Pence to lead the U.S. response to the pandemic.

This was despite Mr. Pence being responsible, as the Governor of Indiana, for the largest HIV outbreak in the state’s history. Worse, government health officials and scientists are required to seek Mr. Pence’s approval before speaking about the virus.

War on science

Mr. Trump has often waged a war on science. In the past, he has made false claims on evolution, called global warming a “total, and very expensive, hoax”, and stated that

vaccines cause autism. However, he seems to have taken a U-turn now, urging pharma companies to come up with a vaccine quickly. “Do me a favour, speed it up, speed it up,” he said. In response, a strongly worded editorial in Science said: “Do us a favour, Mr. President. If you want something, start treating science and its principles with respect.”

As the number of cases started climbing, Mr. Trump changed the narrative. First, he lashed out at the Democrats, calling the virus their “new hoax”. Then he blamed China and

referred to SARS-CoV-2 as a “Chinese virus”. When the term angered Chinese officials and others, he defended it saying, “It’s not racist at all. It comes from China, that’s why.” Later he said he wished China “would have told us earlier”. But according to The Washington Post, U.S. intelligence agencies had raised concerns about the virus in January-February,

but the President continued to downplay the risk and failed to act.

Mr. Trump is known for undermining scientists, institutions and the media. He shut down the White House National Security Council’s entire global health security unit in 2018, an error that is perhaps going to cost him dearly now. He can only sincerely hope that “one day, it’s like a miracle, it will disappear”.

Source: The Hindu





pradhan mantri garib kalyan package · battle against corona virus relevant for gs prelims &...

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